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"Sometimes the "correct" course of action isn't the one that is legally defensible at a cost. Instead, it is the action that ensures one needn't defend anything - legally defensible or not." (Mike Preston)

That would probably be used as evidence that you misclassified the "consultant" in the first place. The auto mechanic is actually a terrific example of what the IRS wants to see for a 1099 contractor. It's really for that situation exactly, and nothing else. If someone is working for you and only you, on a project that you designed the strategy, to be completed in the time-frame you dictated, and in the manner you dictate, if they are working in your office, with your supplies, with support from your staff, they are probably your employee. "He was only working for me on a special project" is not the criteria. No matter how many times I hear it, it is not the criteria.

I agree with Andy - it is just really good practice. Keep in mind the PA is supposed to be sending them SARs, SPDs, and benefit statements, so there really is no excuse not to know where they are. It doesn't really save the plan any money, it just puts off a problem that continues to compound over time.

Judging by the quality of those I have reviewed, these "specialists" are not very successful.