Amending Schedule SB

[Andy the Actuary]

Calendar Year Plan

2012 MRC = $0

5500 on extension

Plan sponsor contributes $50,000 on August 1, 2013. SB filed August 15, 2013 reporting the $50,000 contribution. Plan sponsor contributes additional $75,000 on September 1, 2013 but fails to communicate to EA until 2014. Plan sponsor deducts $125,000 for 2012

For $75,000 to be deductible for 2012, the IRS informal position is it must be claimed on the 2012 and not 2013 SB.

Is it acceptable to amend 2012 SB as of this late date in 2014?

If not, how would this situation be corrected? Claim the contribution on the 2013 SB and ignore the destructibility issue since the IRS has only informally stated their position of not being able to deduct a contribution for a tax year than precedes the Plan Year for which the contribution is claimed?

[Effen]

I don't see any problem amending the filing, especially since they took the deduction.

[Andy the Actuary]

Given that the Schedule SB signing date would be the current data well beyond the 2012 extended 5500 filing date, does that present any problems?

[Effen]

I don't think so. You are correcting the reporting of a contribution that was timely deposited. They made a timely deposit, and properly deducted the contribution, but you just never put on the SB. You are now correcting that error. (Granted, they caused the error and you should charge them for the redo, but I don't see this as a problem.)

[Andy the Actuary]

Effen, thank you.

Noted that original 5500 submission remains posted on EFAST so could always point back to it to demonstrate timely filing despite the revised SB signing date is outside the extended due date of the the year's filing.

[My 2 cents]

This concerns the question as to whether a contribution must be documented on the Schedule SB in order to be deducted. Sure, Question 7 on the 2011 Gray Book says that (to move dates forward) if a contribution is made during the first few months of 2016 (prior to the tax filing deadline, with extensions, for the 2015 tax year) but not shown on the 2015 Schedule SB, then it cannot be deducted for 2015. However, this is not based on anything in 404 or a relevant old Revenue Ruling (the answer in the Gray Book conflates applicable "tax year" with applicable "plan year", as though a contribution not applicable to a given plan year cannot be applicable to a fiscal year coincident with the plan year). There was a presentation the following year at an ACOPA conference "respectfully disagreeing" with the comment in the Gray Book.

Is there anything in any formal IRS guidance to get in the way of taking a 2015 deduction for a contribution made in 2016 prior to the tax filing deadline as extended that was not reported on the 2015 Form 5500 Schedule SB? If so, surely the 2015 Schedule SB can be amended to show the contribution even though already filed without it. Is that necessary?

Suppose that the same thing happened with respect to the 2014 SB and the 2014 tax deduction. Should the 2014 5500 be amended? In that case, should the 2015 PBGC filing be amended, with a claim for a refund if the extra assets serve to reduce the 2015 premium? How far back would one go to realign contributions with plan years to solidify the related deductions if this also applied to 2013?