IRA Financial Group Issues Alert for Solo 401(k) Plan Providers Who Are Selling Solo 401(k) Plan Documents Without an IRS Opinion Letter In Their Name

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A Number of Solo 401(k) Plan Providers are selling plan documents without an IRS opinion letter in their name

IRA Financial Group - Leading Provider of Self-Directed IRA LLCs and Solo 401(k) Plans

A self-employed individual looking to adopt a solo 401(k) plan, should make sure that they receive an updated IRS opinion letter and more importantly that the opinion letter has been issued in the name of the company selling the plan and not a third-party.

IRA Financial Group, the leading provider of self-directed solo 401(k) plans, announces an alert for all sole proprietors and small businesses receiving plan documents from companies that do not have an IRS plan opinion letter in their name. “Over the last several years, there has been a growing number of solo 401(k) plan providers who are marketing solo 401(k) plan documents and are using an opinion letter in another company’s name, “ stated Susan Glass, a retirement tax specialist at the IRA Financial Group. “There is a significant risk of adopting a solo 401(k) plan that was sold by a company that is not the plan sponsor of the documents and, thereby, does not have an IRS opinion letter in their name,” stated Ms. Glass.

The basic solo 401(k) plan documents will include an IRS Determination letter stating that this is a Prototype Plan that meets the requirements of a qualified plan. Generally, if an employer adopts a standardized master or prototype plan, the employer may rely on the master or prototype document sponsor’s favorable IRS opinion letter. The favorable opinion letter assures the employer that the IRS has approved the plan language and that any subsequent tax disqualification of the plan will not be applied retroactively as long as the plan has been otherwise lawfully operated. The assurance that plans will not be retroactively disqualified is sometimes referred to as guaranteed reliance.

The basic plan document is the document containing all of the non-elective provisions and rules governing the plan applicable to all adopting employers. In the case of any amendment to the plan documents, the plan sponsors must make good-faith efforts to amend their plans accordingly. Typically the solo 401(k) plan sponsor will provide the adopting employer plan sponsor with necessary documents to amend the plan documents as required by law. “In the case where the company selling the plan documents is not the plan sponsor, an issue could arise as to who is responsible for providing plan updates and amendments, “ stated Ms. Glass.

According to Adam Bergman, a tax partner with the IRA Financial Group, using solo 401(k) plan documents from a company that does not have an opinion letter in their name offers significant risk. A self-employed individual or small business owner looking to adopt a solo 401(k) plan, should make sure that they receive an updated IRS opinion letter and more importantly that the opinion letter has been issued in the name of the company selling the plan, not a third-party.

The IRA Financial Group was founded by a group of top law firm tax and ERISA lawyers who have worked at some of the largest law firms in the United States, such as White & Case LLP, Dewey & LeBoeuf LLP, and Thelen LLP.

IRA Financial Group is the market's leading provider of IRS approved solo 401(k) Plan. IRA Financial Group has helped thousands of clients take back control over their retirement funds while gaining the ability to invest in almost any type of investment, including real estate without custodian consent.

To learn more about the IRA Financial Group please visit our website at http://www.irafinancialgroup.com or call 800-472-0646.

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Jaclyn Baily
IRA Financial Group, LLC
+1 (800) 472-0646 Ext: 9
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