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Any chance it could be classifed a COVID withdrawal? It sounds as thought that might have been the thought process if it was for $100k. I don't recall if those had any source restrictions though.

I was thinking more of what the OP said about checking the 5558 box on the return when filed: "...get"into gear" and file Form 5500-SF today and check off the box for Form 5558. "

Isn't it also true that if the 5558 wasn't filed timely it's a moot point anyway because the IRS will go back to the original filing deadline to access late filing penalties?

Don't forget the DOL can impose substantial penalties for a late filing in addition to the IRS. The DOL penalty is currently $2,233 a day. DFVCP by comparison is $10 a day with a cap of $750. I think the choice is clear. Also, don't file the 5500-SF saying that it was filed under 5588, if 5588 was not filed. Remember the plan administrator is signing under penalty of perjury. Check the box for DFVCP and pay the $10.

Think I'll withdraw this idea. Thanks!

Why does the plan have the EACA? Do a lot of people take advantage of the 90-day withdrawal window? Do they really need an extra 3 months to do their ADP refunds?

If the IRS grants a waiver then thats what you would tell the DOL if they ever called. But as someone has already said it needs to be something really excpeitonal. The purpose of the DFVC is to cover the crazy stories already. So for example, if the business owner died on October 10th they would definitely waive everything because only a monster would not appreciate the impact of that. If Sally was on vacation and forgot to read her emails before she left it's out of the question. "I've never missed a filing before in 15 years so please just waive it this one time pretty pretty please" also is out. BUT if you ask the IRS to waive and they say no, then I think you just do the DFVC and then right back to the DOL and ask them to waive their penalties because you filed under the DFVC and that would work (in my experience, though it has been many many years).

If it was me, I would recommend the client use DFVCP, especially if it's a small filer. $1,500 is a small price to pay for peace of mind.