June 22. 2011 | Jim Wagenmann

Keogh and Other Owner-Only Plans Need to Be Dealt With

The Internal Revenue Service is looking for such plans that have been in existence for years but have not been contributed to, for whatever reason.  The IRS is looking to disqualify the plan and tax the assets that are in the plan trust account.

Under the law, all plans are to be amended periodically to conform to changes in the law.  There are many such plans that have not been looked at for many years and either continue to file or have stopped filing forms 5500-EZ.   If you have such a plan, it would benefit you to roll over the assets into a new owner-only plan which would be treated as conforming to all of the plan amendments you may have missed.  After doing this, you should then either roll over the assets directly to another qualified plan or an Individual Retirement Account.  Doing so will keep the IRS from being able to disqualify the plan and tax the assets.

If you have any questions or would like to discuss your situation, please let us know.

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