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Let's say there is a problem with a 401k plan and we come up with a fair correction method not listed in EPCRS.  Is automatically ineligible for SCP treatmnt out of hand because its not listed?  Or if we went with this outside-the-box-correction, is the correction acceptable assuming an IRS auditor thinks it was reasonable and justified.

I don't want this question to be distracted by a particular fact pattern.  My question really is just is there flexibility for SCP corrections not specifically delineated (in my case the issue is that the fact pattern is not listed in EPCRS).  I completely understand that there would always be risk under audit that the auditor could find fault.  This correction involves 1 person and is therefore not remotely in the zone for a costly VCP filing.

 

Austin Powers, CPA, QPA, ERPA

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