Money Purchase and 5330

[AJ North]

I have a money purchase plan that did not make the minimum contributions for the past two years. The plan sponsor knows that they need to make up the lost contributions plus interest. My question concerns filing a 5330 and the associated excise tax. I have come across some information indicating that money purchase plans are exempt from the excise tax. Does anyone else have this understanding?

[DMcGovern]

The IRS website specifically states that an excise tax applies if the required minimum funding is not met. In addition, the Section 4971 tax applies to all plans that are subject to Section 412, which includes money purchase plans.

[AJ North]

Thank you DMcGovern for your response and I generally agree. However, I did find some info to the contrary in The EOB/Tripoldi. That info can be found at Chapter 3B - Accruing Benefits, Part 2, Section VIII, Part D Funding deadline/excise tax. If you get a chance to take a look, please let me know what you think.

[DMcGovern]

Thank you DMcGovern for your response and I generally agree. However, I did find some info to the contrary in The EOB/Tripoldi. That info can be found at Chapter 3B - Accruing Benefits, Part 2, Section VIII, Part D Funding deadline/excise tax. If you get a chance to take a look, please let me know what you think.

AJ, I read that section in the EOB and have to agree with you. Great catch! I also checked with an attorney about it and he also agrees - no excise taxes for MPP's, just use EPCRS to correct the operational failure.