Missed Loan Payment

[52626]

Participant has loan and is transferred to another division. During his time with the new division ( they also participant int he plan), his loan payments were not withheld. Participant has now returned to his original division.

Participant wants to bring the loan current and continue making payments.

Participant is past the cure period.

1. Platform will issue a 2016 1099R for the deemed loan

2. Is the only way to avoid the 2016 1099R to file under VCP?

3. Any provisions in the self correction to cover missed loan payments due to management error ( transferring between divisions)?

I can not find any why to prevent the 1099R from being issued unless they file under VCP. Just looking for some thoughts?

Thanks

[Belgarath]

I think you are stuck with VCP. But going from memory (dangerous at best) I seem to recall that Rev. Proc. 2015-27 reduced the VCP fee to a very reasonable amount - I think for a single person it would only be perhaps $300, although of course there would be your fee to handle the filing as well.