401(k) and SIMPLE Plan

[jasdlm]

I know that a company cannot have a 401(k) plan and a SIMPLE plan at the same time. However, the third party administrator for one of my clients says they cannot run in the same calendar year, even if you terminate the SIMPLE and adopt the 401(k) after the SIMPLE termination date. I have confidence in this TPA, so the information is probably accurate, but I'm having trouble finding source material to back it up. I checked section 408 of the code, and I definitely didn't get this out of it, but there is some convoluted language that I could be misreading. I also did a search on the IRS website but only came up with the fact that they can't both operate at the same time, which I already knew.

Does anyone have any insight?

Thanks.