Bungled Opt-Out

[Christine Roberts]

A member of a professional corporation signed a one-time, irrevocable waiver of participation in the corporation's money purchase pension plan. He had previously participated in the plan for several years. The member then terminated employment and was rehired a year later. He signed an additional opt-out form upon completion of the eligibility waiting period. However, he "revoked" his irrevocable waiver and entered the plan shortly afterward. The plan is now under IRS audit, and the agent has said that minimum funding deficiencies may apply. Is there a way to proceed so as to minimize potential penalties?