Jump to content

SEP Problem


Guest ohioattorney
 Share

Recommended Posts

Guest ohioattorney

We have a client that established a SEP. The SEP was created in 2008. The contributions for 2008 and 2009 appear to be fine. For 2010, 2011 and 2012 the financial advisor did not deposit the SEP contributions into the SEP account but into an IRA account. Because the deposits were made into the wrong account, the contributions are not coded as SEP contributions and appear as excessive. The financial institution will not correct the forms. What can be done to fix this?

Link to comment
Share on other sites

You could file a VCP and document the series of events. It appears that the Form 5498 issued reflected the contribution as an IRA contribution instead of a SEP contribution. Remember, it is not necessarily "account" specific since a SEP is "technically" a traditional IRA. With that said, the classification of the "type" of contribution would be reflected on the Form 5498 as opposed to the type of account that actually received the deposit.

Under VCP, I'd ask to simply transfer the funds into a SEP "account"; which really doesn't do anything from a tax perspective. What it does, however, is confront the IRS with the issue before they confront you.

Good Luck!

CPC, QPA, QKA, TGPC, ERPA

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...