We have third party running our Simple IRA plan. In the past, the plan was not offered to all employees. I understand that it should have been and we will do this going forward. I read the FAQ's on the IRS website, and it seems to me that if go forward with the simple plan, we are required to make a contribution on employees' behalf. Either match up to 3% or just do 2%. Our Simple plan administrator says that making a 0 contribution would be okay, and I don't see where that's an option. If we offer the match, and the employees do not make contributions, is that where we could get away with making a 0 contribution?

That's correct. Of course, the employer has to make that decision before the beginning of the year and communicate it to the employees 60 days before the beginning of the year, so that decision should have been made long ago for 2006.