Solo 401k

[Edwards]

Not sure where to place this question. If there is a better forum subsection, please let me know and I can repost it there.

Anyway, I created a Solo 401k for myself (and self only) through Vanguard many years ago. Used it for only 1 tax year and then decided not to use the 401k and moved the funds out (the transfer was legal/ taxes were paid, etc). It has since sat unused for years. I was initially informed it would shut itself down by a Vanguard representative but that is not the case. So, I finally figured I would go through the process of myself and now the IRS is requesting a lot of documentation and $3,500 to shut it down properly.

Obviously, I really do not want to do all this paper work (or hire someone) and also pay a large fee to close this account that was barely ever used. Not really looking to get into a debate about whether or not to use it, why I'm an idiot for ever opening it, etc. I just want to know if there are bigger problems coming for me down the road if I let it continue to sit around empty.

Is there any harm in calling the IRS to cancel the request and then continue to leave it idle?

Thanks in advance for the insight. I appreciate it.

[bacchi]

What's the $3500 for? I've shut one down before and it was as easy as filing an additional form with the IRS.

[Edwards]

What's the $3500 for? I've shut one down before and it was as easy as filing an additional form with the IRS.

The letter says "use fee is due based on the Form 5310 application information. Your plan is not exempt from user fee."

[bacchi]

What's the $3500 for? I've shut one down before and it was as easy as filing an additional form with the IRS.

The letter says "use fee is due based on the Form 5310 application information. Your plan is not exempt from user fee."

Why did you file a 5310? And did you submit all of the Vanguard plan paperwork and the changes through the years?

[Edwards]

What's the $3500 for? I've shut one down before and it was as easy as filing an additional form with the IRS.

The letter says "use fee is due based on the Form 5310 application information. Your plan is not exempt from user fee."

Why did you file a 5310? And did you submit all of the Vanguard plan paperwork and the changes through the years?

Unfortunately, I did not keep up with the paperwork the entire time because I was told it would close itself once emptied. Obviously, this was an incorrect decision on my part. As for why I filed a 5310, I do not remember the exact reason I filled out this particular form but was told to by either a Vanguard or IRS representative (sorry, it was a year ago when I initially attempted to close it so I'm struggling to remember).

Is there a different form I should look into filing?

[bacchi]

What's the $3500 for? I've shut one down before and it was as easy as filing an additional form with the IRS.

The letter says "use fee is due based on the Form 5310 application information. Your plan is not exempt from user fee."

Why did you file a 5310? And did you submit all of the Vanguard plan paperwork and the changes through the years?

Unfortunately, I did not keep up with the paperwork the entire time because I was told it would close itself once emptied. Obviously, this was an incorrect decision on my part. As for why I filed a 5310, I do not remember the exact reason I filled out this particular form but was told to by either a Vanguard or IRS representative (sorry, it was a year ago when I initially attempted to close it so I'm struggling to remember).

Is there a different form I should look into filing?

I filed a final 5500-EZ, which tells the IRS that you're closing the plan.

Ask a professional but your idea sounds good -- keep the plan active, leave it idle, and maybe close it in a few years without filing a plan determination.

[RedmondStash]

ptf -- may have to deal with this myself sometime.

[Edwards]

Does anyone have any people/services they want to recommend so that I can properly and finally close this defunct solo 401k?