Guest jorge casasnovas Posted February 25, 1999 Report Share Posted February 25, 1999 A SEP participant was under-contributed 3 years ago (1996). Can anyone please explain how to correct the situation? Thanks so much! ------------------ Jorge Casasnovas Link to comment Share on other sites More sharing options...
Gary Lesser Posted March 2, 1999 Report Share Posted March 2, 1999 The error can not be corrected. Because there was a failure to provide a uniform allocation (although integration is permitted), the __other__ participant's have recieved "excess contribution" (possibly subject to cummulative 6% IRA contribution penalties) and the e/er has made a nondeductible contribution (subject to a one-time 10% penalty). The good news, the gain may remain in the account. Link to comment Share on other sites More sharing options...
Gary Lesser Posted March 2, 1999 Report Share Posted March 2, 1999 A detailed description of the above described correction method is provided in Proposed (since 1981) Income Tax Regulations Section 1.408-7(d)(5). Link to comment Share on other sites More sharing options...
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