Appendix F to wiggle out of Audit CAP?

[Guest erisamelissa]

We have a client that decided to file an on-cycle DL application without EGTRRA amendments - client thought that a frozen plan did not have to be amended for legislation enacted post-freeze. Naturally, the reviewing agent caught this (wasn't hard to do) and slapped the plan with the $25,000 Audit CAP sanction. The agent also gave us two other options - plan disqualification or withdraw the application.

It has been my experience that if you withdraw the application in this type of scenario, your case gets forwarded to the examinations branch and here come the auditors - that $25,000 sanction has now become the floor and has nowhere to go but up.

I'm wondering, though, if we could withdraw the application and simultaneously file an Appendix F submission. Technically, once the application has been withdrawn the plan is no longer under examination - unless and until the IRS informs the client that the case may or will be referred, we should have a very small window within which to file the Appendix F.

The pit I feel in the bottom of my stomach is telling me, though, that I'm missing something.

Any thoughts?

[Guest erisamelissa]

Oh, well, nevermind. The reviewing agent said that this was not an option and that they would reject the Appendix F. I knew it didn't feel right, but it was worth asking, right?