PART I. IDENTIFICATION OF FAILURE(S) AND PROPOSED METHOD(S) OF CORRECTION

The following failure(s) occurred with respect to the plan identified above. Check the failure(s) that apply. Within each failure, check applicable boxes, and provide the information requested:

not permitted to establish SARSEPs after December 31, 1996.)

requirements of § 408(k)(6) because the Plan Sponsor (and, if applicable, its related controlled group or affiliated service group employers) had more than 25 employees (including leased employees, if applicable) during the following plan year(s):

The plan was adopted by a Plan Sponsor that became ineligible to sponsor a SARSEP under the requirements of § 408(k)(6) because, in one or more plan year(s), fewer than 50% of the employees eligible to participate in the plan elected to make salary reduction contributions. The failure occurred during the following plan year(s):

Description of Proposed Method of Correction

All contributions ceased as of (insert date beginning no later than the date this application is filed under VCP). The Plan Sponsor will not permit any new salary reduction contributions to the plan.

At least one highly compensated employee (“HCE”) deferred an amount which, as a percentage of compensation, was more than 125% of the average deferral percentage (“ADP”) for all nonhighly compensated employees (“NHCEs”) eligible to participate in the plan (§ 408(k)(6)(A)(iii)).

The total excess deferrals for each affected plan year were as follows:

September 2, 2008 535 2008–35 I.R.B.

Description of the Proposed Method of Correction

The Plan Sponsor has made (or will make) nonforfeitable contributions on behalf of all eligible NHCEs. Each eligible NHCE will receive a contribution equal to a uniform percentage of compensation. The uniform percentage is equal to the difference between the (1) ADP that would have been required for a HCE’s deferral percentage to have passed the nondiscrimination test and (2) the actual ADP for NHCEs. (Example: In a particular plan year, an HCE defers 10% of compensation. The ADP for NHCEs for the same plan year is 5% of compensation. However, in order for the plan to pass the nondiscrimination test, the ADP should have been 8% of compensation. The corrective contribution on behalf of each eligible NHCE will be equal to 3% of compensation.) The corrective contribution made on behalf of each NHCE will also be adjusted for earnings. Earnings will be calculated from the last day of the plan year for which the failure occurred through the date of the corrective contribution. The corrective contribution (adjusted for earnings) will be made to each affected NHCE’s SARSEP IRA account. If an affected employee does not have a SARSEP IRA account, a SARSEP IRA account will be established for that employee. Earnings will be calculated for an affected NHCE’s account on the basis of one of the following methods (check one):

(“VFCP Online Calculator”) ( http://www.dol.gov/ebsa/calculator/main.html ), since the actual earnings of the affected NHCE’s SARSEP IRA account cannot be ascertained

for years in which the actual earnings of the affected NHCE’s SARSEP IRA account cannot be ascertained. The VFCP Online Calculator was or will be used for the following years:

The total corrective contribution (before adjusting for earnings) on behalf of the affected NHCEs for each plan year is as follows:

Former employees affected by the failure (check one):

accounts. To the extent that an affected former employee cannot be located following a mailing to the employee’s last known address, the Plan Sponsor will take reasonable actions to locate that employee. Such actions include the use of the Internal Revenue Service Letter Forwarding Program (see Rev. Proc. 94–22, 1994–1 C.B. 608) or the Social Security Administration Employer Reporting Service. After such actions are taken, if an affected employee is not found but is subsequently located on a later date, the Plan Sponsor will make corrective contributions to the affected employee’s SARSEP IRA account at that time.

The Plan Sponsor failed to make employer contributions on behalf of eligible employees as required under the terms of the plan.

The failure occurred for the following plan years: .

2008–35 I.R.B. 536 September 2, 2008

Description of the Proposed Method of Correction

The Plan Sponsor has contributed (or will contribute) additional amounts to the plan on behalf of each affected employee. For each affected employee, the corrective contribution will be determined by calculating the contribution the employee would have been entitled to under the terms of the plan and subtracting any contributions already made on behalf of the participant for the plan year. The required contribution made on behalf of an affected participant will be adjusted for earnings. Earnings will be calculated from the last day of the plan year for which the failure occurred through the date of the corrective contribution. The corrective contribution (adjusted for earnings) will be made to each affected employee’s SEP (or SARSEP, if applicable) IRA account. If an affected employee does not have a SEP (or SARSEP, if applicable) IRA account, a SEP (or SARSEP, if applicable) account will be established for that employee.

The total corrective contribution (before adjusting for earnings) for each year is:

Earnings will be calculated for an affected employee on the basis of the following method(s) (check one):

Calculator for years in which the actual earnings of the affected employee’s IRA cannot be ascertained. The VFCP Online Calculator was or will be used for the following years:

Former employees affected by the failure (check one):

accounts. To the extent that an affected former employee cannot be located following a mailing to the employee’s last known address, the Plan Sponsor will take reasonable actions to locate that employee. Such actions include the use of the Internal Revenue Service Letter Forwarding Program (see Rev. Proc. 94–22, 1994–1 C.B. 608) or the Social Security Administration Employer Reporting Service. After such actions are taken, if an affected employee is not found but is subsequently located on a later date, the Plan Sponsor will make corrective contributions to the affected employee’s SEP or SARSEP IRA account at that time.

The plan did not provide employee(s) who satisfied the applicable eligibility requirements with the opportunity to make elective deferrals to the SARSEP. The failure occurred for the following plan years:

Description of the Proposed Method of Correction

The Plan Sponsor has contributed (or will contribute) additional amounts to the plan on behalf of each affected employee. The corrective contribution will be made to compensate the affected employee(s) for the missed deferral opportunity. The corrective contribution on behalf of each affected employee is equal to 50% of what the employee’s deferral might have been had he or she been provided with the opportunity to make elective deferrals to the plan. Since the employee’s deferral decision is not known, the deferral amount is estimated by determining the average of the deferral percentages for the employee’s group (highly compensated or nonhighly compensated). (Example: N, an NHCE, was erroneously excluded from the plan. During the year of exclusion, N made $10,000 in compensation. The average of the deferral percentages for other NHCEs who were provided with the opportunity to make elective deferrals was 5%. N’s missed deferral is estimated to be: 5% times $10,000 or $500. The required corrective contribution on behalf of N, before adjusting for earnings, is 50% of $500 or $250.)

September 2, 2008 537 2008–35 I.R.B.

The total corrective contribution (before adjusting for earnings) on behalf of the affected NHCEs for each plan year is as follows:

The corrective contribution made on behalf of each affected employee will also be adjusted for earnings. Earnings will be calculated from the date(s) that the contribution(s) should have been made through the date of the corrective contribution. The corrective contribution (adjusted for earnings) will be made to each affected employee’s SARSEP IRA account. If an affected employee does not have a SARSEP IRA account, a SARSEP IRA account will be established for that employee. Earnings will be calculated on the basis of one of the following methods (check one):

for years in which the actual earnings of the affected employee’s IRA account cannot be ascertained. The VFCP Online Calculator was or will be used for the following years:

Former employees affected by the failure (check one):

accounts. To the extent that an affected former employee cannot be located following a mailing to the employee’s last known address, the Plan Sponsor will take reasonable actions to locate that employee. Such actions include the use of the Internal Revenue Service Letter Forwarding Program (see Rev. Proc. 94–22, 1994–1 C.B. 608) or the Social Security Administration Employer Reporting Service. After such actions are taken, if an affected employee is not found but is subsequently located on a later date, the Plan Sponsor will make corrective contributions to the affected employee’s SEP or SARSEP IRA account at that time.

of the SARSEP ( e.g., the lesser of 25% of compensation or the applicable limit under § 402(g)).

The total of the Excess Amounts for each affected plan year was as follows:

2008–35 I.R.B. 538 September 2, 2008

Description of the Proposed Method of Correction (check all correction methods that apply)

The Plan Sponsor has effected (or will effect) a corrective distribution of the Excess Amounts, adjusted for earnings through the date of correction, to the affected participant(s). The earnings adjustment will be based on the actual rates of return of the participant’s SARSEP IRA account from the date(s) that the excess deferrals were made through the date of correction.

Affected participants were (or will be) informed that the corrective distribution of an Excess Amount is not eligible for favorable tax treatment accorded to distributions from a SARSEP and, specifically, is not eligible for tax-free rollover.

The total corrective distribution (before adjusting for earnings) for each affected year is as follows:

The Plan Sponsor has effected (or will effect) the return of excess employer contributions, adjusted for earnings through the date of correction, to the Plan Sponsor. The earnings adjustment will be based on the actual rates of return of the SEP or SARSEP from the date(s) that the excess employer contributions were made through the date of correction. The amount returned to the Plan Sponsor is not includible in the gross income of the affected participant(s). The Plan Sponsor is not entitled to a deduction for such excess employer contributions. The amount returned is reported on Form 1099–R as a distribution issued to the affected participant(s), indicating the taxable amount as zero.

The amount to be returned to the Plan Sponsor (before adjusting for earnings) for each affected year is as follows:

Note: If this correction method is selected, an additional VCP fee is required. (See section 12.05(2) of Rev. Proc. 2008–50.)

September 2, 2008 539 2008–35 I.R.B.

participants as follows:

The earnings adjustment will be based on the actual rates of return of the SEP or SARSEP from the date(s) that the excess employer contributions were made through the date of correction.

For one or more participants, the total Excess Amount (employer contributions and/or elective deferrals before adjusting for earnings) is $100 or less. The Excess Amount will not be distributed.