Can't determine ADP/ACP testing methods for 1997-1999.

[R. Butler]

We have takeover plan. The Plan needs to be updated, but I can't determine ADP/ACP testing methods for 1997-1999. The Plan Sponsor switches TPA's frequently. The Plan Sponsor doesn't have good Plan records for 1997-1999. Prior TPA's are either unable or unwilling to help.

Any suggestions on how to handel this?

[Earl]

My opinion is "who cares?"

I have 3 plans under audit and IRS is looking at 2000. At most 1999 is an issue.

And, if you get audited, sponsor produces the records and you find out you guessed wrong, you change it.

In all seriousness, anyone think the IRS/PWBA is going to care?

(of course you tell them what you have to do in completing the questions and get them to indicate which way you will guess, current or prior.)

[mbozek]

I thought the statute of limitations for disqualfiying a deduction is generally 3 years from the date the return is filed. If so the s/l for 1999 could expire as early as 3/15/03 and the s/l for prior years has expired unless the deduction was more than 25% of the er's gross income. As Earl said who cares?

[maverick]

Disregarding the "out" via statute of limitations, I think R Butler just wants to get the document restated without having prior/current options elected on the adoption agreemnt come back to haunt him/her. I've had a couple restatements with the same problem. The cover letter included with the new plan documents indicated that, since it could not be determined what testing method was used, we checked "current year".

[Guest Robin Vatalaro]

I was told informally at the 5/02 San Diego AICPA benefits conference that the IRS has unofficially said to use current year when no other info is available.