Participant receive too much money on failure of discrimination test

[KateSmithPA]

One of our clients failed their discrimination test and had to have money returned. By mistake, the asset company made two distributions instead of one. That is, the participant received twice the amount he should have received. The checks were issued a week or two apart and the participant cashed each check. My question is, what is the solution for this? Can the participant return the amount that was issued to him by mistake? Can he keep the money and just pay the taxes on it? Is there some other solution?

[rcline46]

Distribution in error, participant must return amount. Make sure 1099 gets corrected. Or trustee must put in funds (mutual fund on hook - they could if participant won't return them).