Correction of Overpayment Redux

[jlea]

Plan improperly distributes $150 of employer contribution as part of an in-service withdrawal. Discovered three years later. Participant is currently employed and remains a Participant in the Plan. Unfortunately, the amount at issue is over the de minimis threshold.

Of course, Rev. Proc. 08-50 would say take reasonable steps to have the overpmt (adjusted for interest) returned to the Plan, notify the P that it was not eligible for favorable tax treatment, and, to the extent that there is a shortfall b/w what is returned and the amount necessary to make whole the Plan, the ER contributes the difference.

My question: If the Plan notifies the P that the amount wasn't eligible for favorable tax treatment, can the ER just go ahead and make the contribution? ER doesn't want to request the overpayment if necessary.