minimum funding penalties

[Guest JBeck]

Employer A has a money purchase plan and employer B has a profit sharing plan. Both employer A and employer B are part of a controlled group, but did not realize it. As a result, employer A's plan fails coverage for many years but employer B's plan does not. The IRS has discovered this mistake. The obvious solution is to include employees of employer B in employer's A plan. But employer's A plan is a money purchase plan, and the IRS wants to assess severe penalties for the failure of the plans to meet the minimum funding rules, which it says it will not waive. Is there any way to get the IRS to waive the minimum funding penalties or to get around such penalties?