1.Employer establishes a SEP on form 5305-SEP but cannot find the form. Is this correctable in VCP?

2. Same employer maintains a qualified plan at the same time as the employer maintains the IRS form 5305-SEP, in violation of the terms of the SEP document which states that no plan can be maintained. Is this correctable in VCP and how would you propose correcting it?

1. SEPs are covered under EPCRS. An SEP document failure would be correctable the same as a qualified plan with a document failure: compelte the document with a retoractive effective date. In this case, you'd proabbly need some proof of the existence fo the SEP (old statements, for example) back to the document's initial effective date.

2. This should be correctable under EPCRS. I suspect you would have to show that there were no contributions or forfeitures to the qualified plan, and there was no Secton 415 violation for the SEP & qualified plan, combined. If there were contributions to the qualified plan, then you'd have to promise not to make them again--or, perhaps you establish a non-IRS model SEP as a correction to the Form 5305 SEP, and make the new document retroactive to the SEP's original effective date.

Represented plan sponsor who maintained SIMPLE plan and qualified plan (covering different sets of employees) for six years. Accepted correction under VCP was to stop making contributions to the SIMPLE plan. Note - VCP submission was made in 2006, so not sure the Service's position has changed.