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Failure to deposit employee deferrals - Employees no longer employed


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Employer discovered they had missed depositing SIMPLE IRA deferrals. Some of the employees are no longer employed, and some may have cashed out their SIMPLE IRA. How would the employer handle depositing the late deferrals (plus earnings, etc.) if the IRAs have been closed.

What happens if the employee has moved out of the country and can not be located?

Thanks for the input.

QPA, QKA

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Employer discovered they had missed depositing SIMPLE IRA deferrals. Some of the employees are no longer employed, and some may have cashed out their SIMPLE IRA. How would the employer handle depositing the late deferrals (plus earnings, etc.) if the IRAs have been closed.

What happens if the employee has moved out of the country and can not be located?

Thanks for the input.

Even if the employees cashed out their account it maybe its open to accept contributions. In any event the employer must deposit contributions for all eligible employee in order to prevent the plan contributions from being disqualified. The Tax court recently denied a deduction to an owners SEP because the owner did not make a contribution for his spouse who worked for him.

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