Note:

IRC 4973 and IRC 4974 excise tax are now handled in the discrepancy adjustment process (previously Form 5329 processing.) IRC 4973 and IRC 4974 adjustments are to be added to Form 4549-E (as "other taxes" ) and the issues listed on the Form 1040 RAR. Use Forms and letters listed for EP Form 1040 discrepancy adjustment to process these cases.

You may also pick up Forms 5330 for IRC 4979 as discussed in IRM 4.70.14.2.4.2.2(6) If you do, follow the procedures in IRM 4.70.14.2.1.2.4, EP - Processing Agreed Forms 5330 and 990-T.

Prepare Letter 1758-A to close a SEP or SARSEP examination that you determined to be non-compliant and wasn’t resolved through a closing agreement. Letter 1758-A should:

Specify the year(s) the SIMPLE IRA does not meet the requirements of IRC 408(p).

Clearly state why the SIMPLE IRA does not meet the requirements of IRC 408(p).

Specify the consequences of failure to meet the requirements of 408(p), including a list of participants with excess contributions and the amount of excess contributions.

Inform the SIMPLE IRA sponsor that they’re required to notify plan participants of their excess amounts and that IRC 4973 tax applies on the excess monies not withdrawn (plus earnings). See Employee Plans Examination Exhibits for an example of Letter 1758-D.