SEP Contribution Deducted on Tax Return, Never Received by Custodian

[MarZDoates]

We have a client who just now noticed that their 2003 SEP contribution (paid 10/04) checks never cleared the bank. They contacted the investment company, and they have no record of receiving the contribution. The contribution was deducted on their 2003 tax returns.

I would expect that we should self-correct under the EPCRS (correction of insignificant operational failure) by making the contribution now and adjusting for earnings. If we do that, can we still deduct on 2003 tax return?

Thanks in advance for any and all input.

[Gary Lesser]

I do not believe the deduction for the good-faith contribution can be deducted until it is contributed, but the deductible amount can be carried forward (subject to the 25 percent deductible limit for that year).

Was the oversight disovered during the annual bank reconciliation?