Correcting Loan Allocation Error / PT Similar to TAM 201425019

[401 Chaos]

Interested in guidance regarding how to go about correcting a share allocation error for a few years similar to the situation described in TAM 201425019. Our facts are not exactly the same as the TAM but close--basically a different variable interest rate from the one required by the plan document and loan document, etc. was inadvertently used for a few years which resulted in slightly fewer shares being allocated than should have been.

The allocation error seems easy enough to address and to put participants back in the position they should have been in by recalculating the allocations and allocating the few missed shares to affected participants through VCP / EPCRS.

In addition to that, however, seems we have a prohibited transaction issue as well and presumably need to pay an excise tax. In the TAM, the ESOP apparently got audited by the DOL and the DOL agreed not to take any action (i.e., no excise tax / penalty) if the ESOP corrected by fixing the share allocation which it did. The IRS, however, apparently came in on the heels of the DOL and determined that an excise tax was due.

In our case, we do not have an audit by either DOL or IRS. ESOP just wants to correct and is willing to pay the excise tax. Can it file VCP under EPCRS and also pay excise tax to the IRS but not pursue a separate correction with the DOL? Alternatively, should it try to notify the DOL of its correction with the IRS or perhaps fix with the DOL directly and not pay the excise tax to the IRS? (I have been thinking this might play out similar to delinquent contribution situations where an excise tax is paid to the IRS and DOL follows up based on the affirmative Form 5500 response but does not pursue further action once notified of the correction/ excise tax payment to the IRS.)

Would welcome any guidance / experience on dealing with dual IRS / DOL regulation in this context. Thanks.