Termination of plan with "fuzzy" history

[billfgrady]

We represent a client who asked us to update his qualified plan for GUST and then terminate the plan. Among other problems, the client does not have a copy of the plan document, as this and all documents relating to the plan were apparently lost at some point. We were able to track down the firm that restated the qualified plan in 1994. Fortunately, that firm was able to provide us with written copies of a Profit Sharing Plan and a Money Purchase Pension Plan. That firm also confirmed that the documents were created by Sungard Corbel. They were uncertain whether the either of the plans had a favorable determination letter.

We also contacted the accountant for the Plan, which last filed a Form 5500 some five years ago. This 5500 reflects that no contribution was made to the plan for the 1999 Plan year. However, this 5500 shows a different plan name (and there is only one, not two 5500s). No 5500s have been filed in the interim, on the basis that the Employer did not pay its sole employee any compensation for the years in question. Accordingly, we cannot tell when the last contribution was made.

Our firm, relying on this limited information, merged the plans and amended and restated the surviving plan for GUST prior to September 30, 2003. We are now in the process of filing Form 5310 with the Service.

Anyone ever encounter a situation like this before? Any advice?

[Alf]

Not having det letters is not going to be the problem, it is the prior documentation. Do not file a det letter application without being able to prove up prior law amendments. The IRS will send you into Audit-CAP and you will lose the favorable fee schedule for a voluntary submission. You should run your voluntary DFVC and EPCRS non-amender appliactions and file the 5310 as part of that process.

[billfgrady]

I should clarify: this is a 5500-EZ setting, not a 5500 setting. My understanding is that DFVC program is not available for filers of the 5500-EZ. Is there another alternative program? Do we just file the delinquent 5500-EZs?

I'm not worried about the plan(s) not having a prior determination letter. It's just that a determination letter might help me shed some light on whether the plans have been merged and/or amended and restated since 1994. Is there any way to find out whether an employer has submitted for a letter in the past?

[Alf]

Other than old 5500s that had the question about whether a det letter has been issued, I don't know of any informal method. Of course the IRS has all of the records in theory, but I have never been brave enough to ask them in a situation like yours where you do not want to alert the government that something may be off. Is it really very likely that a det letter application was filed for a plan with 0 or 1 participant? It sounds like a long shot. I know you know this already, but I would assume that you have everything that exists.

[billfgrady]

Actually, given that the name of the plan was different from either of the existing plans (as I understand them to be) on the last filed 5500-EZ (see my above modified post on this on 5500-EZ and DFVC), I cannot be confident that I have everything. But you're right, at some point we need to terminate the plan with what we've got.

[Guest dietpepsi]

I frequently have our clients call the IRS customer service line to find out if they have any prior determination letters. The IRS should be able to find them based on tax ID#. The number is 1-877-829-5500.