Ineligible Employer SIMPLE IRA
Small employer has sponsored SIMPLE IRA for 8 years.
Employer recently discovers/recognizes that it’s part of a controlled group with thousands of employees and Employer has been ineligible to sponsor a SIMPLE IRA for the entire 8 years.
What’s the fix? Is it as “simple” as stopping contributions and filing for a compliance statement under VCP?
Seems too easy.
Thanks.
Permalink Submitted by Alan - IRA critic on Thu, 2025-05-22 13:00
It might be that easy, but it’s difficult to determine what the IRS will decide. Since none of the entities were eligible for a SIMPLE IRA due to head count, making up the contributions to the other employees is not a solution.