wsp Posted June 20, 2007 Posted June 20, 2007 Client was hit with random IRS audit for 2003 plan year. Plan year ends 6/30. Turns out that 3 employees were missed on the contribution allocation. My recommended correction (vested portion of contribution plus income) was accepted by IRS and money will be contributed to plan. My only question is...is it a deductible expense for 2007 py or do they miss out on the deduction altogether. If it's deductible...for what year?
J Simmons Posted June 20, 2007 Posted June 20, 2007 I think its deductible for the tax year in which made, 2007. John Simmons johnsimmonslaw@gmail.com Note to Readers: For you, I'm a stranger posting on a bulletin board. Posts here should not be given the same weight as personalized advice from a professional who knows or can learn all the facts of your situation.
PLAN MAN Posted June 20, 2007 Posted June 20, 2007 I'd say the missed contribution is deductible as an employer contribution in the year contributed. However, I think the income is treated differently. This would not be considered an employer contribution, but could be treated as a regular business expense.
Guest mjb Posted June 21, 2007 Posted June 21, 2007 See Rev. Rul. 76-28. Deuction for contribuion is only available in yr contributed or if made by due date for fing the return. The income is also a contribution to the plan.
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