Original 401k adoption agreement from 2001 signed but not dated

[Guest usafa89]

I am in the midst of an on-cycle FDL request and working with reviewer through his issues. Final issue relates to an original adoption agreement/prototype plan with an original effective date (as noted within provisions of adoption agreement) of 7/1/01. The adoption agreement was signed by the employer/officer, but not dated. IRS is threatening plan with heavy sanction because I cannot find a board resolution or other proof of the date of formal adoption. Any ideas on how to argue that the absence of a signature date beside the signature should not invalidate the adoption of the plan on 7/1/01, when the adoption agreement indicates that is the original effective date?

I am grateful for any suggestions - other than looking for a dated document. I have traced the ends of the earth for something to indicate a date of adoption of the plan - and am coming up with nothing. Has anybody had success negotiating with an IRS reviewer that the lack of a date on an original adoption agreement should not invalidate the proper adoption of the plan and render the plan "nonqualified"?

I understand the lack of a date on an amendment that has a drop dead execution date per statute is damning, but this was the original plan document and it seems to me that there is some argument that the date typed into the "Effective Date" section of the adoption agreement should constitute the "dated" element that the reviewer is looking for.

Thank you in advance for any thoughts.

[Belgarath]

Well, if they are determined to apply a hard line then you may be stuck. You've probably tried these arguments already, but are there things like employee handbooks? SPD's? Investment disclosures? E-mails? Was a 5500/SAR filed timely - although these wouldn't prove timely adoption of the plan, they would indicate that the plan was operated legitimately, and if nothing else, possibly aid in negotiating a reduced penalty if ultimately imposed.

Possibly the plan adoption agreement could actually have been signed as late as 6/30/02, depending upon the plan type and assuming the plan has a year of 7/1 - 6/30. Is there any additional documentation available prior to that date? (P.S. I just realized this is a 401(k), so assuming deferrals, this wouldn't have been an option)

I have no brainstorms here, but maybe someone else will. Good luck!

[Guest usafa89]

Thank you very much for the response - I will pursue some of these extrinsic documents.

[MoJo]

We've had "inconsistent" results with respect to documents (plans and/or amendments) that don't contain a (handwritten) date on which the document was signed. We've used "extrinsic" evidence, including corporate records, emails, even timestamps of when a document (fully executed) was "scanned" into our paperless system (i.e. if we "scanned" it on a certain date, it must have been signed before then).

The inconsistency arises in that different reviewers accept different things as proof of execution. We even had one refuse EVERYTHING saying in his response that "while what you have provided would be conclusive proof in a court of law, it isn't sufficient for me...."

We threw our hands up on that one.

[ESOP Guy]

My first job out of college was with the IRS. I reviwed mostly Sch C tax returns during my time. We had people working there that took hardlines like you and MoJo describe back then also.

At some point you are entitled to ask to get a supervisor involved. Also, while I don't have any experience with the qualified plan appeals officers but on the income tax side most of those people saw there job as to find a resolution that was consistant with the law but reasonable. They were always more open to some kind of negotiation.

I guess what I am saying there are ways to get in front of other people where you might be able to make a reasonable case and they are more open to it if the current reviewer isn't.

[Lou S.]

We had an audit that had a typo on some signature dates the year got put in accidentally as X+1 instead of X in a few spots and no one caught it. The IRS was threating a closing agreement over the "late" adoption of the amendment but we were able to produce e-mails, UPS overnight reciepts both ways at te time of the amendment showing everything was done in year X and that year X+1 was a typo. Eventually they relented but I think we went back and forth several times before they agreed.

As others had said if th IRS wants to take a hard line you may be out of luck but my experience is they are usually very reasonable if there are no real problems with the plan and it is just a form over substance issue.

[Guest usafa89]

Thank you all for your responses. I have found some extrinsic documents that were executed and dated contemporaneously with the prototype adoption agreement, such as the Mass Mutual Prototype Plan Registration form and investment account forms, an SS-4 and 2848 that were all signed by same guy who signed adoption agreement and all dated (except the adoption agreement of course). I have faxed these to the IRS and am mid-prayer as I write hoping the IRS gods will be kind to me.

Cheers!

[Guest usafa89]

Well - good news to report. The IRS ultimately accepted a certification by the past president of the sponsor (who is no longer employed by the sponsor) that the adoption agreement was signed on the specific date we thought it was. I received an FDL on the plan today.

Along with related documentation from the broker showing when the service agreement was signed and when the funds selection documents were signed with the American Funds - all of which had the same date - it worked. I just wanted to follow up to let you know that in this case, the IRS accepted a good faith effort and extrinsic documentation. So - if you are in a pinch - it is worth reaching out to old service providers and past executives who may be able to substantiate missing dates on documents.

Thank you for all of your help.