Failure to make distribution under 401(a)(9)

[nancy]

Can this failure be corrected without filing with the IRS or must you file under VCP and request a waiver of the excise tax?

[Tom Poje]

personally, I think the answer is as clear as mud.

Appendix A (.06) of the EPCRS says you can go ahead and make the minimum distributions under either VCP or SCP.

The question would be the issue of the possible tax penalty.

The ERISA Outline Book says yes you can self correct the minimum distribution and go ahead and make it, but you still have the tax issue.

I'm not 100% sure because if SCP is to set the plan in a position as if the error hadn't occurred then why would the penalty still apply. since most of the articles I have read says the IRS usually ends up waiving the penalty then why go through the process. Of course, that doesn't make it right to 'skip a step' either.

In other words, I don't know for sure, except to say that it is certainly possible to correct at least one end of it under SCP (not just VCP)