A plan administrator inadvertently neglected to issue a Form 1099-R in 2009 for a deemed distribution that occured that year. What is the correction procedure in 2011 when this is discovered?
Rev. 06/11/04, E-mail Alert 2004-10; Rev. 02/15/11, E-mail Alert 2011-3;

The IRS Employee Plans Compliance Resolution System (EPCRS; Rev. Proc. 2008-50) Voluntary Compliance Program correction procedure permits the Form 1099-R to be issued for the year in which the error was discovered — but only if the employer submits the plan under VCP and pays the appropriate VCP fee based on the number of plan participants. Thus, in this example, a Form 1099-R could be issued for 2011 if the employer submitted the plan under VCP (Rev. Proc. 2008-50) and then the participant would report the deemed loan as part of his income-tax filing for 2011.

If the employer does not wish to file under VCP, the correction would be to issue the Form 1099-R for the year in which the loan was deemed, in this case for 2009. The participant would then have to file an amended tax return for that year.