Loan correction under EPCRS

[cdavis25]

A client is correcting a loan that exceeded the 50,000 limit and missed some loan repayments due to the fault of the employer. They are correcting it under EPCRS. Now, my question comes with the Form 5330. Do they have two PTs here: one for the loan in excess of 72(p)(2)(A) and one for the late loan repayments? So, the amount they owe is 15% of the loan excess and 15% of the interest on the late repayments?

[cdavis25]

Nobody wants to touch this?

[Tom Poje]

apparently not. I'm no loan guru.

maybe. you have at least 1 prohibited transaction

1 for the excess on the amount above 50,000.

then you might have a second one on the employer for failure to transmit payments (if indeed payments were deducted but not sent in) - that is the same as failure to send in deferrals on a timely basis.

If there were no loan payments deducted, then I don't see where you have a prohibited transaction, you simply have a loan that has gone into default. that is something else.

both correctable under VCP but not SCP.

[Bird]

I agree; the missed payments are not PTs.