Correcting a No Plan Situation

[Guest jvajj]

We have a client who purchased an annuity contract as part of his 401(a) plan in 2006 and signed off that a qualified plan was in place beginning that year. In 2009, it has been determined that the client's accountant never actually had him adopt a plan. So for a couple of years he has been funding a plan and taking deductions accordingly, but with no plan document in place. Does anyone know if there any way to remedy this situation through any of the correction programs? Any help would be appreciated. Thanks.

[Guest Sieve]

I don't think you can correct--at least, I think it would be an aggressive approach. But, it might be worth a "John Doe" application--all you lose is the applciation fee. (See EPCRS, Section 10.10.)

But, if there is anything in writing before 2006 year-end that looks like it significantly describes plan provisions, and if the employees received a description of the "plan" before year-end, then lack of a signature is not material. At least that's what the rule used to be--I wonder, now, though, whether that rule has gone by the wayside with the current IRS approach to unsigned amendments/documents.