Employer started a SARSEP in 1996. In second quarter of 2002 "switched" to a 401(k) and now wants to "switch" back to the SARSEP. There were some SARSEP deferrals in the first quarter. Can the employer "re-start" the SARSEP?

The scenario you describe above has some potentially tricky plan cooridination (aggregation) issues at a minimum. You will need to prove the the combination of plans does not exceed 404, 415, etc.

However, before you get into all of that - why does this employer think they want to switch back to a SARSEP?

P.S. good luck with GUST & EGTRRA updates!

The IRS has never addressed this issue. However, if the SARSEP as not terminated it sd be okay. However, to avoid numerous problems, the amendment should be effective the following year. That being said, however, employees must be given notification of any amendment to the SEP or risk subjecting the plan to full ERISA reporting requirments. [See DOL Reg Section 2520.104-49]