ADP Failure - Terminated Plan/Bankrupcy Company

[Lou S.]

As the title implies a terminated plan of a bankrupt employer is processing late refunds for the 2010 year, after 3/15 but before 12/31. This is not an automatic enrollment plan with the 6/30 deadline.

Who pays the excise tax and files the 5330 in this case when the Plan Sponsor is out of business, has gone through bankruptcy and now no longer exists?

[PensionPro]

I am not 100% sure on this, but I believe bankruptcy does not relieve an employer of the obligation to pay the excise tax. Courts have differed on whether the excise tax should be treated as tax or penalty, but not on whether the employer owes the excise tax. Who is signing the 5500?

[Lou S.]

Who is signing the 5500?

The 100% owner of the bankrupt company who is also the plan trustee as well as the partcipant receiving the refund who is also is going through a personal bankruptcy.

So assets in qual plan that were exempt are now going to taxable, subject to the backruptcy and hit with an exice tax - talk about adding insult to injury after his company went under with the economic colapse.