Excess contribution to IRA due to testing failure

[Bird]

This is a variation on a common theme - ADP testing failure ($7900), but participant already rolled over the money.

In this case, he terminated and rolled over in 2014. They just did the ADP testing and issued a 2014 1099-R with code 8 (it was actually an amended 1099-R b/c he already got one for a 2014 refund of 2013 excess, plus the rollover; two separate ones of course).

If it were a plan, we'd say "too late" and he'd have to pay tax on the excess but leave the money in the plan and pay tax on it when it comes out.

Since it's an IRA, I was (originally) thinking he had to (but now think he can) leave it in, but could call 6500 of it a non-deductible contribution for 2014, pay a 6% penalty tax on the other 1400, and call that a nondeductible contribution for 2015 and be done with it (except for the hassle of having nondeductible contributions). Is that an option?

I'm also thinking that it's not really too late to take it out if he wants - he "just" has to pay the 6% tax for 2014 on the entire amount, then can take it out in 2015. Is that also an option?