"De Minimus" Form 5500 Error?

[sloble@crowleyfleck.com]

Client has discovered that over the years it has been mis-counting the number of participants in its self-insured health plan. (Essentially it has not been counting a small group of part-time individuals who participate by taking limited hospital discount benefits under the plan because they are not eligible for the major medical portion.)

The actual number of participants is not material to the filing in the sense that the plan has always been well over 100 and has been keeping up with annual filing.

My inclination is to correct the error going forward but not worry about trying to come up with correction figures and amending the returns.

As anyone had any experience with discovering filing information errors that are insignificant or de minimus?

[WDIK]

What do you consider "de minimus?" 1% error, 5% error, 10% error?

[sloble@crowleyfleck.com]

Out of about 275 participants, about 25 per year were not counted--say 10% or less--but the de minimus aspect in my view is the fact that counting the participants properly would not have provided any finling exemption.

The plan is unfunded so there is no SAR required either.

[RCK]

I agree with your original inclination--fix it going forward. I would include some documentation in the file of the first fixed filing, explaining the correction, just to be safe.

RCK

[WDIK]

Although I wouldn't consider a 10% error de minimus, I wouldn't be overly concerned about filing an amended return in this case.

On the other hand, how much actual work would be involved in changing one line on the Form 5500.