Unreported contribution

[tymesup]

A large contribution was made early in 2006. Some of it was reported on the

2005 Schedule B. Some of it was reported on the 2006 Schedule B. Some of it

has not yet been reported.

Can the 2007 Schedule B list it as being made in 2006? Will this cause any

problems? Does this violate any rules?

Thanks for any help.

[david rigby]

By "reported", are you focusing solely on "shown on the Schedule B"? Or is this also a question about deduction?

In general, a contribution cannot be made for X plan year before the plan year begins. If you have some amount not yet included on the B, is there any reason you cannot amend the 2006 B?

[tymesup]

"Reported" = shown on Schedule B.

The client had some cash, wrote a check. The (prior) actuary was able to use some of it in 2005. He reported the 2006 deductible amount on the 2006 Schedule B. The client deducted everything (more than the deductible amount) in 2005/2006.

There's no funding deficiency. It's not clear that a Credit Balance helps this client under either ERISA or PPA. I don't see any benefit to refiling the Schedule B.

The 404 assets are bigger than the 412 assets, which is a minor annoyance.

[Mike Preston]

Since there is no deficiency, there is no requirement to refile. Just modify the opening credit balance on the 2007 Schedule B as if the amount was properly reported on the 2006 Schedule B.

[tymesup]

Since there is no deficiency, there is no requirement to refile. Just modify the opening credit balance on the 2007 Schedule B as if the amount was properly reported on the 2006 Schedule B.

Does the IRS track the CB from year to year? I've been told they track Schedule I EOY/BOY assets.

[Mike Preston]

Don't really know. All I know is that this is how we have been told to handle it and this is the way I've done it whenever it has been needed. Worst case scenario is that the mis-match either generates a letter asking for clarification or the "audit score" for the client is "enhanced".