Controlled group of corporations, 5500 was incorrectly filed for each

[R. Butler]

We just took over a 401(k) plan. The plan is made up of a controlled group of corporations. The prior administator was filing a separate 5500 for each member of the group. I have never seen a situation like this before. How do I correct it?

Any input is appreciated.

[RCK]

Assuming that the original filings were all done under different EINs, here's what I'd do.

Create a correct one, being careful about the EIN and making sure that it is for the parent. Submit it as an amended return, with a cover letter that explains what you are doing. This is certainly a situation where a cover letter is appropriate.

Then I'd keep copies of your corrective filing handy for next year, when you get all the inquiries asking where the subsequent year filings are for all the erroneous filings.

[KJohnson]

and the next year, and the next year .....(believe me I know).

[R. Butler]

It has been suggested that we may be able to correct this by filing two 5500's for 2000. On one of the them would be a final 5500; we would show a transfer of assets on the schedule I.

I know technically there hasn't been an actual transfer of assets, but it may avoid the problem of fututre inquiries.

Any thoughts?

[RCK]

As a practical solution, it just might work.

I would be concerned about doing that because it so far from the real facts of the situation--there was not a plan termination, and there was not a transfer of assets. I think that is just compounding the error, and if it were my problem, I would not do it.