Minimum Funding Standards

[Guest MichaelO]

I have a client with a Money Purchase Plan who has just discovered that they did not fund 2002's contribution properly. They under-funded one of the Partners by $4,710.00 (confusion between individual's CPA and the Firm's accountant). We will be amending the 2002 return and will file a 5330. My question is, since I'm new to this area of admin, do we just have to file the 5330 for the amended 2002 return, pay the 10% excise and have them fund it or does anything carry forward for 2003? They will fully fund 2003's contribution plus the 2002 shortfall on or before 9/15/04.

[WDIK]

It is my understanding that as long as the funding deficiency is corrected by the next funding deadline that you only need to file the 5330 for the 2002 plan year. However, be prepared for penalties and interest for filing the 5330 late.

[Guest MichaelO]

WDIK, thanks for the reply. When was the 5330 originally due and what might the penalties and interest be? Again, please forgive my ignorance but I have not encountered this sort of thing before.

[mbozek]

Why not download the form and instructions at www.irs.gov?

[Guest MichaelO]

I will do that.