Failure to Deposit Elective Deferrals - SCP or VCP

A plan sponsor's accountant did not fully transmit payroll contributions to the plan for 10 months of the year. (How they did not notice the substantial amount of money built up or warnings from the recordkeeper is unknown - Excess of $75k).

It looks like the IRS states that significant mistakes made in the aggregate may be self-corrected by making a corrective contribution by December 31. (SCP)

However, in my opinion, this is one of the worst mistakes that can be made while operating a plan.  Would anyone know of a reason this wouldn't fall under SCP?  It seems too significant, but maybe it is not.

Hi John.  Assuming the amounts were withheld from pay and not contributed to the Plan timely, I would recommend correction under the DOL's VFCP.  The contributions, and appropriate earnings (I recommend using the VFCP earnings calculator), should be deposited now (or as soon as possible).  Once the correction is made, a VFCP application would be submitted to the DOL along with proof of deposits, reconciliation to payroll records, etc.   In addition, Form(s) 5330 and the appropriate excise tax must be filed with the IRS.