"Forever disqualified?"

[Guest jfp]

Assume 401(a) plan has operational defect for a few years or maybe even only one year. Employer discovers the error and corrects it prospectively only, but not to take advantage of any of the available EPCRS alternatives. Assume timely and accurate 5500s with Schedule Ps filed every year.

I believe the IRS' position is that the plan remains subject to disqualification FOREVER. In other words, even if IRS examines the plan AFTER the SOL has closed on the last year in which the defect occurred, it can still disqualify the plan currently and assess back taxes, etc., for all open years. However, I'm not sure where this position is stated specifically (other than the inference from the EPCRS Rev. Procs.). Can anyone provide a citation?

[mbozek]

See Rev ruls 72-368 and 73-79. Failure to meet 401(a) requirements in one year does not prevent plan from qualfiying in a later year.

[Guest jfp]

But isn't the IRS' position that you have to correct the operational errors which occurred in closed years in order to requalify the plan going forward? I know that this is a condition of EPCRS, but that's not what I'm talking about. My question is: isn't the IRS' position that the plan is subject to disqualification for all open years even if the operational defects occurred in closed years?