This book answers some of the most basic questions that arise in plan administration. “Who is an employee for plan purposes?” “Which employers must be aggregated in testing plans?” “Who is the employer of a particular worker?” The answers to these questions often depend on the controlled group, affiliated service group, and leased employee rules of Internal Revenue Code Section 414, which will be thoroughly explored in this book.
In the nature of things, the book will also cover topics important for other elements of benefits administration as well as issues affecting tax practitioners outside the benefits arena. For example, the discussion of the differences between employees and independent contractors is helpful for anyone dealing with an employment tax audit. Similarly, the discussion of controlled groups, while focused on retirement plans, will also help in identifying component members of controlled groups for corporate income tax return purposes. The attribution rules used in dealing with affiliated service groups are the same rules used in determining highly compensated employees and in applying many other Code provisions.
This chapter will provide a framework for the chapters which follow. It will summarize the different ways a worker can be considered an employee for retirement plan purposes, and what it means to be an employee.
This chapter will also address questions regarding the types of entities which may be employers. New types of organizations, such as limited liability companies, have become popular. Understanding how these and other organizations, and their owners, are treated for qualified plan purposes is fundamental to this book.
 | Q 1:1 For qualified plan purposes, who is treated as an employee? |
| Q 1:2 Can these various ways of being an employee overlap? |
| Q 1:3 What difference does it make to a plan if someone is an employee? |
| Q 1:4 If in doubt, is there a problem with erring on the side of treating someone as an employee? |
| Q 1:5 What difference does it make if two businesses are aggregated for plan purposes? |
| Q 1:6 What types of entities are recognized for federal tax purposes? |
| Q 1:7 How is the tax status of an entity determined? |
| Q 1:8 Are there “entities” which are ignored even if they have multiple owners? |
| Q 1:9 Who is a self-employed individual for plan purposes? |
| Q 1:10 What is an owner’s earned income? |
| Q 1:11 What are net earnings from self-employment? |
| Q 1:12 How are self-employed individuals treated for plan purposes? |
| Q 1:13 Who is the employer of a partner who is a self-employed individual? |
| Q 1:14 How is the compensation of a self-employed individual determined for plan purposes? |
| Q 1:15 Are there special rules for plan deductions of self-employed individuals? |
| Q 1:16 How are ministers and other religious workers treated for purposes of determining if they are self-employed individuals? |
| Q 1:17 How are self-employed individuals treated by welfare benefit plans? |
| Q 1:18 What special rules apply to fishermen? |
| Q 1:19 What is an owner-employee? What difference does it make? |