I have read in other threads that for purposes of calculating the 4975 15% excise tax for late contributions, the "amount involved" is the lost earnings. Does anybody have any authority/cite? In my search for some sort of definite cite, all I have came up with is commentary (which all agree with the thread postings). If anybody has a cite, I'd greatly appreciate it.

Thanks

Look at the regulations under Code Section 4975, which will direct you to other regulations (5978??) that define what the amount involved in.

The instructions for the Form 5330 also make it fairly clear....

See also the IRS' new Revenue Ruling at 2002-43, where a disqualified person borrowed money from the plan. They took the money out, instead of putting the money in late -- but the result is the same in that it's a prohibited transaction involving a loan. It just came out and is at http://www.benefitslink.com/IRS/revrul2002-43.pdf

Thank you very much for all your information