"How do other plans typically handle the requirement that distributions begin no later than the 60th day after the end of the plan year in which the participant attains 65, has 10 years in the plan or terminates service if the 12/31 valuation is not completed by the 60th day? Do you pay a portion of the benefit and then true it up when the valuation is complete?"

"If an individual mistakenly makes a contribution to an IRA and wants to cancel the contribution can this be done by withdrawing the contribution by the due date of the individual's tax return without including in income and without penalty? I know IRC Section 408(d)(4) addresses and provides favorable tax treatment to withdrawals of excess contributions to IRA's (in excess of 219 limits) prior to the tax return filing date, but I'm not aware of any tax rules that provide favorable tax treatment to individuals who want to nullify and withdraw a mistaken IRA contribution that is not an excess contribution. Any opinions on this?"

"My client has a SEP IRA that received contributions for 2021. However, the client wants to set up a DB Plan by year end 2021. Does setting up a DB Plan automatically invalidate the SEP IRA resulting in 'excess contributions' for the SEP per 408(d)(4), and thus a tax free distribution to participants if made before tax return is filed in 2022?"

"Sponsor of a plan has had 401(k) under existing company for many years. Sells assets of company, not the company, the employees stay with original company and receive the W-2 under the name of the newly formed company. Buyer keeps company name, keeps employer ID number; my client changed the name of his company and has a new EIN, keeps the employees and the plan remains intact, no distributions.

I have been told by IRS (after being on hold for over an hour), that IRS agents have been advised to treat this in only one of two ways, neither of which makes any sense in this instance: 1. merge the plans or 2. terminate the existing plan and the new sponsor has to set up a new plan and file as an initial return. This totally makes no sense, as the assets are not being merged, they are with, let's say Hancock. Hancock just changed the sponsor to the new name and the contracts under the plan with the name change. The plan is not being terminated, the sponsorship has been terminated.

In the past, we have entered the name of the new sponsor in Box 1 and noted the change since the last 5500-SF had been filed in Box 4. Doing so has been a disaster in previous years. This has led to IRS Letters, Notices and Invoices ad infinitem asking for the 5500s for the old sponsor, and the client has really gotten angry and of course, blames the TPA. Client receives letter from IRS, sends to accountant as client does not know what to do, accountant sends back to client at least one month later, after the response due date, and TPA, with POA of course answers.

Wouldn't it spare the client, TPA and accountant a lot of time and trouble if we mark the existing plan as terminated, do a final return; and an initial return under the name of the new sponsor and show either distributions or trustee-to-trustee transfer, as the Trustee has not changed. But then, wouldn't IRS be on the lookout for 1099Rs?"

"Looking for some guidance on amending a safe harbor plan before the plan year begins but after the notice was provided. I have a safe harbor plan with a discretionary profit sharing (New Comparability formula) that has no allocation or eligibility requirements. They want to amend the plan for 1/1/2022 to add 1 year of service, age 21 and last day of plan year with 1000 hours requirement to receive profit sharing. Since this is late December, the safe harbor notice for 2022 has already been distributed. Can we amend the plan since it has not started yet and send a revised safe harbor notice, or would the notice requirement of 30 days prevent this change from being made until 2023?"

"We have a few small plans whose only tax deposit is for the annual withholding on participant RMDs. This is usually done through EFTPS with no problem, but now as we approach the end of the year, they are being surprised that they are unable to login to their EFTPS accounts. I was told by a representative that accounts are being inactivated due to not having made a tax deposit in the past 18 months. Considering that RMDs were suspended in 2020, these small plans haven't made a tax deposit since 2019. So they have had to go through the trouble of re-enrolling, waiting for the PIN to arrive in the mail, etc., and hope they can get the tax deposit in before the end of the year. Just ridiculous."