A DOL audit of a plan revealed several minor problems
with trustee expenses. The DOL claimed the Fund
had paid improper benefits totaling $3,000. The fiduciaries
in question paid the money back to the plan rather than
go to battle over a nominal amount of money.

With the closing letter, the DOL sent a copy of the form
5330 and notified the plan it was referring the case to
the IRS for the possible imposition of the 15% excise tax.

The problem I have is determining whether these
trustees would need to file the form. Many of the issues
cited by the DOL were debatable at best. There also
was no administrative hearing on the issues. Thus, my
question is who decides whether a PT has occurred and
triggered the 5330 filing requirement? What procedure
does the IRS follow when it gets a referral from the DOL?
What is the best course of action for the trustees?

Did the anyone sign an admission that the transactions were a PT? If so then there is proof that a PT had occurred. The IRS collects the PT tax from the persons who benefit from the PT. There is a second stage tax of 100% if the first tax is not paid.

No, that is the problem. Most of those
involved either sent a check, or a
check with a scathing letter critical
of the DOL findings. No one admitted to
a PT. Most owed only $100-$200 for things
such as spousal meals, in-room movies,
an extra day on a rental car, etc. Nothing
too egregious.

Not from a dollar standpoint. But personal benefits are the ones most likely to be considered "egregious" when large dollar amounts are involved.

The plan administrator has to make a decision as to whether to report the transactions as PTs which will necessitate amending the 5500. (I recall there used to be a question on the 5500 as to whether the plan engaged in a PT). The PA needs to retain a tax advisor to determine whether the 5500 should be amended and who would be responsible for paying the PT tax. By the way many corporate employers have similar restrictions on reimbursements of employees for business trips so I dont think the DOL was out of line.