Is WALK-CAP available for SEP-IRA?

[Guest caray]

A SEP-IRA of a self-employed individual requires by the terms of his 5305-SEP document a 1 year waiting period for eligibility. The SE individual had been told that he could require a 3 year wait and at the end of 1999, the 3 year waiting period was satisfied by his only employee. Since he made contributions for himself but not his employee for 1997 & 1998, those two years are vulnerable. No IRA was established for the employee in 97 or 98. I understand that some

practitioners have received a closing agreement under Walk-in CAP although Rev.Proc 2000-16 does not mention SEP-IRAs. Has anyone utilized this relief? Would it allow making make-up contributions (including earnings) for the employee for 97-98? What penalty was assessed?

Cecil Ray

Dallas, Texas

[Gary Lesser]

Walk in cap is not possible, but that being said, the IRS has been known to allow a district level closing procedure. Speak to the EP Division Chief or Chief Technical.

------------------