Message Boards Digest

September 29, 2021

Here are the most recently added topics on the BenefitsLink Message Boards:

flowersarenice created a topic in 401(k) Plans

IRS Wants $300,000 for Late Filing of My Form 5500-EZs

"I filed 5500-EZ Delinquent Filer Penalty Relief Program along with $1,500 check for 6 years of returns in December 2020. Solo 401k. IRS cashed the check but later sent me a letter asking me to pay. I replied that I already paid, that was in March 2021 with me sending proof of the cashed check. I got another letter in September, two weeks ago, saying the IRS has a $1,500 check from me and needs to associate that with a return. I faxed a reply saying that's for my 5500-EZ. I called the IRS number and the rep is saying that the $1,500 was applied to certain years like 2016 but not to other years. So 2014 and 2015 don't have a payment on file. 2016 does. The 2017, 2018 and 2019 returns have not been processed yet. I sent in these forms last December.

Now I got a CP 283, demanding I pay $300,000 within 30 days!

I called the IRS number and the rep told me to fax documents, responding to the CP 283. [1] Should I contact the taxpayer advocate? [2] What happens at end of October when the CP 283? Any help is greatly appreciated as I am in a state of panic."

2 replies so far   |    Click Here to Add a Reply

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Belgarath created a topic in Retirement Plans in General

Sole Proprietor's Employees Are Paid by Another Company

"John Doe, Sole Proprietor, sponsors a 401k plan, using a volume submitter pre-approved document. John has several employees, all covered under the plan, everything seems fine. However, it turns out that unbeknownst to the prior TPA (and if there's a problem, likely not their fault, as apparently neither client nor CPA ever informed them) the employees of John are actually PAID through another company. Details on this other company not yet known, but apparently has a different EIN than John. The reasons why it's handled this way are unknown. The CPA likely had good reasons for it. I'm not making any judgments since this is outside my sphere of knowledge.

Now, my understanding has always been that the IRS will only issue one EIN to a sole proprietor. If that's correct then this other company, apparently 100% owned by John, must be something other than a sole proprietorship.

At any rate, my question is this: Assuming these are 'employees' of John, is the fact that payroll is run through another company in the controlled group a problem in and of itself? This other company has NOT signed on as a Participating Employer, and the document provides that employees of another member of a controlled group are not covered under the plan unless a Participating Employer Agreement has been signed. Although it's the CPA's purview, can John deduct contributions if payroll is through another company?

I'd love to hear any thoughts on the situation. Thanks in advance."

4 replies so far   |    Click Here to Add a Reply

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