Late Deposit with Plan Year and ER Year Mismatch

[Guest gails]

I have a client whose plan is a fiscal year plan with a Sept 30 year end. He changed his business entity structure so that now his business is a single member LLC, which is a disregarded entity for tax purposes. He files his business return as a Schedule C on his 1040 on a calendar year basis.

For the first time since he changed his business entity structure, he has decided he wants to make a profit sharing contribution for his 2009 - 2010 plan year. His cpa has advised him that as long as he makes the deposit by the extended due date of his 2010 return (Oct 15, 2011), it will be deductible on his 2010 return. Everything I find says that when there is a mismatch in year ends, the deposit would be for the employer year ending with or within the plan year. To me, this means that for the 2009 - 2010 plan year, the contribution would be taken on the employer's 2009 tax return as long as he made the deposit by the extended due date of his 2009 tax return. As he did not make the deposit by then, the contribution would be a deduction in the year the deposit is actually made.

One of my problems with this is the regulations make no sense to me (yes, I know that they don't have to). The client would have had to make the deposit by October 15, 2010 (assuming his 2009 return was put on extension,) and his plan year would have just ended on Sept 30, 2010. In theory, if his plan year ended on October 31, then he would have had to make the deposit before his plan year even ended.

Can anyone offer any advice or help? We are amending the plan so that the plan year will be Dec 31 and we will not have this issue again. However, we have it now and the cpa wants our concurrence with how he is handling the contribution. Thanks.