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Under section 4.02 of EPCRS, you can self-correct insignificant errors while under examination. See below. Not sure reallocating an entire year would qualify as "insignificant." If these won't work, I think you'll have to use Audit CAP. .02 Effect of examination. If the plan or Plan Sponsor is Under Examination, VCP is not available. SCP is available only as follows: (1) Insignificant Operational Failures. While the plan or Plan Sponsor is Under Examination, insignificant Operational Failures may be corrected under SCP. (2) Significant Operational Failures. If correction of significant Operational Failures has been substantially completed (as described in section 9.03) before the plan or Plan Sponsor is Under Examination, the Plan Sponsor may complete correction of those failures under SCP.

OK; so the above is correct. Now let's look at your original question: Can Business 2 just adopt Business 1 plan as an Adopting Employer, since they will create a Controlled Group? Would there be Plan Amendment needed only for that? They are absolutely a brother-sister controlled group. Thus, Company B is free to adopt the existing plan of Company A as an additional adopting employer. The addition of an adopting employer IS an amendment to the plan. I don't know what you mean when you use the word "only" in the second sentence; you need to make sure the proper process is used to add an additional adopting employer, which for us would be an amendment to the plan that we prepare and is adopted by the existing plan sponsor, the new adopting sponsor, and all the trustees.

Excellent question. Quote from the instructions for Line 15 of the SB (emphasis added):

On a personal note, as a person who got back into the dating pool after being divorced for 10 years, I quickly found out that you can find marriage and divorce records online for almost any county in the United States, because people tend to "Fudge" the details about marital status . . . .

Mike is correct, more facts are needed. Fully insured medical is not subject to 105. Self funded and Section 125 are subject to discrimination testing, but depending on the facts, this situation might pass.

Need more facts. Just because the employer pays the premium it doesn't mean that the employer is treating the amounts paid as not includable or reportable on the employee's W-2. Are you sure the entire premium, both the regular and the family coverage, is being run through the 125 plan and not showing up as taxable on the W-2?

You might want to send the new information regarding his never been married to whoever at the client is in charge of communicating with the health plan. Your client may be under a contractual obligation to do so. Seems like healthcare fraud, at the least.

I have no doubt that "spouse being terminated due to COVID" will qualify. I would proceed on that basis without hesitation.

Leave it blank. It does not get a 5500 number (which is what the digits represent).