Old plan not amended

[Cynchbeast]

We were contacted by someone with a very old plan who wants to terminate and rollover all his money to an IRA. The ONLY participants in the plan have been the owner and his wife (always a 5500-EZ), and unfortunately, he has only the original plan documents. They have never been amended or restated (about 20 years old).

1) What would IRS's position likely be concerning a one person (h/w) plan that terminates under these conditions?

2) What would be the best way to bring this plan into compliance?

[ESOP Guy]

If there is a good amount of assets in this plan so the tax implications are large I would not simply terminate this plan and roll the money to an IRA.

If the assets are high it would seem like a VCP to get everything corrected would be cheap insurance. I get the impression that if one can show the plan was run in accordance with the law but the document got out of date a VCP can be pretty forgiving. I would consult a VCP expert before you go off and do this but that is my limited experience on the topic.

If the asset amount isn't very high and the tax implication are low it might be safer to just take a taxable distribution.