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http://www.irs.gov/irm/part4/irm_04-072-008.html "4.72.8.1.2 (09-01-2006) Formality of Valuation 1.Whether a formal valuation is required will depend on the transactions that occur with the plan and the form of the plan. •For example, the valuation in a single participant plan, a self-directed account, or frozen plan can be less formal in a year in which the plan or self-directed account receives no contribution and makes no distribution or change in investment. 2.The reasonableness of the method for valuing plan assets is based on the surrounding facts and circumstances. Except for certain employer securities held by an ESOP, there is no absolute requirement the annual valuation be based on an independent appraisal. On the other hand, it may be reasonable for an agent to request an appraisal for hard-to-value assets under certain circumstances, such as when distributions are made to plan participants."

Definitely! Too bad they aren't like us actuaries who speak as one voice on all topics.

Your issue is that you missed the 415 funding deadline to have those contributions considered as annual additions for the 2011 year; not to mention deductibility. HOWEVER, there is an exception to that 415 funding deadline when the contribution was missed due to an oversight. My first approach would be to document this in order to ensure the contributions get treated as annual additions for 2011. I would treat deductibilty as a secondary issue; that does need to get addressed. You "may" submit under VCP (but there may be enough there 'already' to treat the contributions as annual additions for 2011). A submission would merely be added insurance. I would doubt the IRS would allow the deduction for 2011 (but there is nothing to preclude you from asking for it). You may, then, be looking at reducing the contributions for the current year in order to avoid exceeding the deduction limit (assuming your limit is already close to 25% each year). Good Luck!