restatement

[Gary]

A 401k plan was not restate yet for EGTRRA.

What would IRS do if submitted now?

Is it best to restate and not submit for DL?

FYI It is a pre approved Sungard Relius plan doc.

Any other suggestions?

Thanks.

[12AX7]

VCP is the way to go.

[Guest Sieve]

If you adopt a late EGTRRA restatement, do NOT apply for FDL without also applying for correction under VCP. In fact, do not adopt late unless you also apply for VCP correction.

VCP fees are 1/2 if restatement is adopted within 12 months of RAD (RAD is 4/30/2010 for this plan if pre-EGTRRA document was also a Corbel pre-approved doc--i.e., 1/2 fee applies until 4/30/2011)--but, if you also missed interim amendments, then I think the fee is the full amount.

[Guest Matthew Gouaux]

This recent IRS publication should help. It lays out the process for correcting the problem you describe.

http://www.irs.gov/pub/irs-tege/0430_nonam...mission_kit.pdf

[Gary]

Good information. Thanks.

What about restating and not submitting for DL?

Say plan is terminated in a few years prior to next restatement and DL applied for at termination.

This is allowed isn't it? A DL is not mandatory?

So only down side I see is that if plan has a problem and there is no favorable DL letter in the past, there could be issues?

FYI

It is a husband and wife only 401k plan.

thanks

[Guest Sieve]

Potential problems I see if EGTRRA restatement is adopted late and no correction is made under VCP:

• Plan is audited by IRS or DOL--late EGTRRA restatement will be discovered.
  
• Want to obtain FDL at termination, IRS submission will include most recent document and all prior documents (if there is no prior FDL)--late EGTRRA restatement will be discovered.
  

In each case, penalties will be far in excess of VCP fees. Makes no difference who participants are.

Don't play with fire. File under VCP. Fee is $750, and application is easy to put together.

[Guest Matthew Gouaux]

What you need is a compliance statement. You do not necessarily need a determination letter. You would need to proceed with a VCP submission to obtain a compliance statement.