Failed to terminate Solo 401k after becoming a full time employee
I'm not sure where to post this question and am hopeful someone here has some advice. I set up an individual 401k in 2009, and had self-employment income until 2011. I started a FT job in 2010, and subsequently asked an advisor about rolling it over. I was informed that you can't terminate a plan that is in your name (business name was my name) as how do you prove separation from business? Turns out this was bad advice. I haven't had self-employment income since then, but kept the 401k with the intent that I would go back to having self-employment income upon retiring from employment (which was in a different career). I did keep my CPA license active. From what I have been able to determine when researching online, this could have worked to establish continuity of business IF I filed a Schedule C at least once every three years - even if it had zeros on it; however, I didn't do that. I just hit the threshold to file Form 5500-EZ in 2024, but missed the due date in 2025 so filed under the IRS Penalty Relief Program. I recently decided to roll this over to an IRA as I became disabled and it is very unlikely I will ever be able to work again, and discovered that I should have terminated the plan much sooner (or filed the "zero" Schedule C), or there could be penalties.
TLDR: inaccurately kept a solo 401k with no contributions for 15 years (no SE income and no Schedule C filed, though I kept my business license active).
Questions: What are the potential penalties? And is there any way to get ahead of this by "fessing up" to the IRS? I'm considering attaching a statement to my 2026 “final” 5500-EZ admitting the oversight and saying that I did maintain my business license.
Is anyone aware of a situation where the IRS did access penalties for something like this?
Is there a different subreddit that would be more applicable to my situation?
Thanks in advance for any wisdom you can share!