Limit on One-to-One QNEC Amounts?

[ETA Consulting LLC]

Just wondering if anyone has ever encountered a situation where the one-to-one QNEC correction was so excessive that the IRS has agreed to reduce the required amount under VCP.

Let's suppose (for sake of argument) that a failed corrective distribution requires a one-to-one QNEC of $10 million dollars (and that would be less than the required $20 million QNEC to actually correct the ADP test.

[[i used these extremes to avoid the conversations on ALL options of late corrections of ADP tests and focus squarely on VCP submissions for one-to-one]]

My question is simply whether anyone has had experience with having the one-to-one reduced to a lower percentage (let's say 0.50 to 1) utilizing the argument of the excessive level of funding for a one-to-one?

I ask while imagining the answer is no, but wanted to ask in the event someone may have been successful in getting this amount lowered in certain instances.

Thanks :-)

[John Feldt ERPA CPC QPA]

Yes. Under a VCP application a negotiated amount was maybe a third of the usual 1-1 contribution. Some fairly extreme circumstances applied, including the employer's financial state at the time, which had to be proven with the reviewer.