Participating Employer did not adopt plan

[Sully]

I am the TPA on a PSP that is scheduled to have their 2006 plan year audited by the IRS. The plan sponsor is a member of a controlled group of corporations (2 companies) and both companies participate in the plan and make profit sharing contributions. I just realized that the plan document does not provide for participation by one of the companies. The document says an affiliated employer may participate in the plan if it adopts the plan, but it does not appear that this was ever done. Also, the document says the sponsor is not a member of a controlled group (which is obviously incorrect).

Anybody know what kind of sanctions we might be faced with? Also, is there a way to include the other company in the plan at this point in time?

Thanks in advance for any assistance.

[QDROphile]

You shold be able to fix in VCP with retroactive adoption if the plan has operated as if timely adopted.