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Amend a Final 5500-EZ?


cowdogman

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If a sole proprietor in 2018 (1) terminated a solo 401(k) by written resolution, (2) rolled the funds to an IRA and (3) filed a final 5500-EZ reflecting a zero "end-of-year" balance, is it possible to resurrect the 401(k).

I have seen other discussions about reversing (1) and (2) above, with the consensus being (I think) that reversal is doable by a new resolution and moving the funds back to the 401(k) account.  But what about filing an amended 5500-EZ reflecting the renewed status of the 401(k)--after a "final" 5500-EZ has been filed?

Any thoughts appreciated.

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Here's how I see un-doing a termination in relation to your 3 steps:

  1. resolution to terminate is executed.  No problem at all to un-do this, either by just losing the resolution (not "right") or drafting another ("right").
  2. funds are rolled out to an IRA.  I'd have a hard time justifying an un-do after this point.  I mean, sure you can tell the IRA custodian to roll money out and into a plan, but then what was the justification for the initial rollover from plan to IRA if not termination of the plan?  It's likely you could "get away" with this part from a strict reporting standpoint, as long as everything is done by direct rollover, but I think the initial rollover is invalidated by voiding the termination.
  3. Final 5500EZ is already filed.  I suspect that all 5500-EZs go into a black hole, except for purposes of checking and following up to assure that future years are filed.  IOW I don't think the IRS is going to come back and say "oh no, you can't amend a final return and un-do a termination" and somehow drop the hammer.  But I wouldn't do it based on my answer to step 2 above. 

Ed Snyder

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Thanks Bird.

I took another look at the previous threads about "un-terminating" a 401(k) plan, and I was mistaking the 100% vesting for distribution.  None of the other threads had a distribution, just 100% vesting and preparation for a distribution.  So, I see your point on step 2.

As to your question "then what was the justification for the initial rollover from plan to IRA if not termination of the plan?" could the sole proprietor take the position that the distribution was an "operational failure" that is being self-corrected by resurrecting the 401(k).  Acknowledged that's more of an "excuse" than a "justification."

Thanks.

Update:  Coming to the conclusion this is a "bridge too far".  Thanks for the reply.

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