Premium only plan has been operated as if it had "negative electi

[Guest mo again]

Premium only plan has been operating on "negative election" basis even though plan document requires positive election. This fact has surfaced because of an IRS audit of the corporation. Now the IRS has requested a copy of the plan, and I am concerned that once they receive it, they will request copies of the nonexistent election forms.

Any suggestions for arguing this one? It seems like revocation of the plan's tax-exempt status would hurt the employees more than the employer.