"Client with 401(k) and another client with SIMPLE Plan are merging in a stock sale. There will be a third, brand new company (effective 01/01/2022) with a new EIN for all employees. The new company wishes to continue the 401(k) plan with the new company as the Plan Sponsor and terminate the SIMPLE plan (which would happen regardless because there will be well over 100 employees after the merger). I believe I understand the transition year, which in this instance will be the 2022 plan year. However, if all employees are now on the same payroll in 2022 (under the 'new' company and EIN), is it still possible to have the SIMPLE participants making SIMPLE contributions and the 401(k) participants contributing to the 401(k) plan for the 2022 transition year?"

"Does anyone have a Disclaimer of Benefits form I can use? I'm sure there's a standard or I could probably create my own, but I don't want to re-create the wheel. We have a spouse who wants to disclaim the benefits of his deceased spouse and have the kids get the money. As I understand it, he cannot disclaim the benefit and choose who it goes to, but that's not an issue because the terms of the plan say that after the spouse, the benefit goes to children equally. In this case, not in RMD pay status."

"We have a law firm client that's looking for options to making their partners whole because they have to pay 100 percent of the cost of their coverage outside the cafeteria plan.

This may not make them whole, but the only option I can think of might be for the partnership to pay a flat amount to each partner (or maybe just the cost of employee-only coverage) for the coverages as a business expense. I would recommend the same flat amount as each partner shares in the partnership's profits, so the dollar amount contributed to the partnership should not favor family coverage over single or spousal coverage. The partner may need to include the payments in gross income, which he should be able to deduct on his income tax return. Are there any other options?"

"H and W divorce. Both are under 59-1/2. H is awarded $11,000 from W's IRA. He does not intend to roll it over. An Order Transferring IRA Incident to Divorce (similar to a QDRO) is drafted, signed by H and W and approved by the court.

If this were a distribution from a qualified plan under a QDRO, H would include the distribution in his income but would not be subject to the 10% early withdrawal penalty. Question: Is H subject to the penalty tax here?"

"A client would like to know whether the 16b indicator can be removed. Any idea how this could be done?"

"Current 401(k) plan will have around 140 participants as of 12/31/2021, thus making it subject to a certified audit. The plan sponsor, to avoid the cost of an audit, desires to split the plan into two (plans are identical), effective 1/1/2022, so that each plan has 70 participants, making them not subject to audit. The assets of the plan will not be split, but, rather will remain in the current trust, and will be administered and 'record-kept' by the current TPA.

[1] Because the old plan will technically have 140 participants on 1/1/22, and then, later in the day, will be at 70/70, is the old plan subject to a one day audit? [2] Is it allowable for the assets of both plans to be in the same trust? I would say yes if the trust were designated a Master Trust, but the TPA has no idea as to what a Master Trust is. I did some reading and came upon a Group Trust, but this appears to cover plans of different employers."

"A client closed down her single member plan and its final liquidation occurred on 11/23. The balance is $0. My next step is to prepare a final form 5500-EZ. Do I use the 2020 form and change the year-end to be 11/23/2021?"

"If a company with 1 employee (the owner) claims SIMPLE contributions on the tax returns and has not made the contributions for 2019, 2020, and 2021, what is the best solution? It's not a lot of money that's owed to the plan (under $15,000 plus earnings). All of the contributions go to the owner as employee and employer contributions. Any insight is appreciated!"