VCP For Loan Correction

[Stash026]

I have a plan that needs to correct for 5 loans that were previously defaulted, with 1099's issues, but it's been discovered that the error was caused by the Employer.  I want to make sure I'm completing all the necessary forms to have the defaults reversed and allow these participants to begin making repayments as they desire to.  Can someone please let me know which are the required forms?

Thanks in advance!

[Luke Bailey]

Stash026, I think your first question is did the error cause a default, e.g. did no payments occur for a period an not caught up by end of next calendar quarter? The fact that default occurred because of the employer's error generally won't make a difference. If the error continued long enough that there were actual defaults, then you would need to correct the defaults under Rev. Proc. 2016-51. If this was caught quickly enough that there have been no defaults, then I think you just need to have some sort of communication between plan and participant showing how the loan was reinstated and caught up and issue corrected 1099-R's.