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Documenting Hardships Distributions and Participant Loans [2016]
Presentor: Derrin Watson Recorded Date: 2/3/2016 Duration: 60 Min.

This program was recorded during a live presentation given on February 3, 2016 at 12:00PM EST.

Processing hardship distributions and participant loans can be a headache for practitioners and plan sponsors. One area of considerable confusion – and some disagreement – is the level of documentation required to substantiate hardship and participant loan requests. This web seminar will review the documentation requirements for loans and hardships and will review recent IRS comments on the topic.

  • Required and recommended documentation
  • Prudent review and approval processes
  • Participant self-certification
  • Evidence of:
    • Hardship need
    • Hardship necessity
    • Loan application and review
    • Loan documents
    • Loan proceeds used to purchase principal residence
  • Loan repayments and collection activities
  • Proof of distribution and tax reporting
  • Audit risks

There are no prerequisites or other advanced preparation for this program. No prior experience needed.

Level: Introductory

Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: S. Derrin Watson, J.D.
Recipient of ASPPA's 2006 Educator of the Year Award

Objectives: After attending this Web seminar, an attendee should be able to:

  • Determine what documentation should be maintained by the Plan Administrator
  • Explain when a participant can “self-certify” their eligibility for hardships or loans
  • Compute an individual’s earned income
  • Compute the plan compensation of self-employed individuals
  • Apply the requirements to minimize compliance risks for plan fiduciaries
  • Address conflicting opinions regarding these legal and regulatory requirements

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