Non amender in audit

[ombskid]

An accountant called about a plan (no tpa) that got audited. The latest plan document the client has is 2003 ( a GUST prototype). The voluntary program for nonamenders is not available if the plan is under audit.

Any idea how steep the penalties run for a one participant plan that has missed GUST and EGTRRA?

[Guest Sieve]

I cannot speak from experience about these sanctions--& I suspect they depend on the agent. But, you might want to start by reviewing the audit CAP sanction provisions of EPCRS (See Section 14 of Rev. Proc. 2008-50 - http://www.irs.gov/pub/irs-irbs/irb08-35.pdf).

[Kevin C]

We had a plan like that come to us several years ago when an IRS auditor discovered that the plan had not been amended in 10+ years. The sanction was $6,500 and they had to adopt a current restated document.

[shERPA]

We just closed one, timely restated for GUST but late interim amendments and EGTRRA restatement as I recall. Initial IRS "offer" was substantially higher, but eventually they followed the audit CAP schedule in RP 2008-50.