-CITE-
26 USC CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-MISC1-
Sec.
4971. Taxes on failure to meet minimum funding standards.
4972. Tax on nondeductible contributions to qualified
employer plans.
4973. Tax on excess contributions to certain tax-favored
accounts and annuities.
4974. Excise tax on certain accumulations in qualified
retirement plans.
4975. Tax on prohibited transactions.
4976. Taxes with respect to funded welfare benefit plans.
4977. Tax on certain fringe benefits provided by an
employer.
4978. Tax on certain dispositions by employee stock
ownership plans and certain cooperatives.
[4978A, 4978B. Repealed.]
4979. Tax on certain excess contributions.
4979A. Tax on certain prohibited allocations of qualified
securities.
4980. Tax on reversion of qualified plan assets to employer.
4980A. Tax on excess distributions from qualified retirement
plans.(!1)
4980B. Failure to satisfy continuation coverage requirements
of group health plans.
4980C. Requirements for issuers of qualified long-term care
insurance contracts.
4980D. Failure to meet certain group health plan
requirements.
4980E. Failure of employer to make comparable Archer MSA
contributions.
4980F. Failure of applicable plans reducing benefit accruals
to satisfy notice requirements.
4980G. Failure of employer to make comparable health savings
account contributions.
AMENDMENTS
2003 - Pub. L. 108-173, title XII, Sec. 1201(d)(4)(B), Dec. 8,
2003, 117 Stat. 2478, added item 4980G.
2002 - Pub. L. 107-147, title IV, Sec. 417(17)(B), Mar. 9, 2002,
116 Stat. 56, substituted "Archer MSA contributions" for "medical
savings account contributions" in item 4980E.
2001 - Pub. L. 107-16, title VI, Sec. 659(a)(2), June 7, 2001,
115 Stat. 139, added item 4980F.
1998 - Pub. L. 105-206, title VI, Sec. 6023(18)(B), July 22,
1998, 112 Stat. 825, substituted "certain tax-favored accounts and
annuities" for "individual retirement accounts, certain section
403(b) contracts, and certain individual retirement annuities" in
item 4973.
1996 - Pub. L. 104-191, title III, Secs. 301(c)(4)(B), 326(b),
title IV, Sec. 402(b), Aug. 21, 1996, 110 Stat. 2050, 2066, 2087,
added items 4980C, 4980D, and 4980E.
Pub. L. 104-188, title I, Sec. 1602(b)(5)(B), Aug. 20, 1996, 110
Stat. 1834, struck out item 4978B "Tax on disposition of employer
securities to which section 133 applied".
1989 - Pub. L. 101-239, title VII, Secs. 7301(d)(2),
7304(a)(2)(C)(iii), Dec. 19, 1989, 103 Stat. 2348, 2353, struck out
item 4978A "Tax on certain dispositions of employer securities to
which section 2057 applied" and added item 4978B.
1988 - Pub. L. 100-647, title I, Sec. 1011A(g)(1)(B), title III,
Sec. 3011(c), Nov. 10, 1988, 102 Stat. 3479, 3625, redesignated
item 4981A as 4980A and added item 4980B.
1987 - Pub. L. 100-203, title X, Sec. 10413(b)(2), Dec. 22, 1987,
101 Stat. 1330-438, added item 4978A.
1986 - Pub. L. 99-514, title XI, Secs. 1117(b)(2), 1121(a)(2),
1131(c)(2), 1132(b), 1133(b), title XVIII, Secs. 1854(a)(9)(C),
1899A(75), Oct. 22, 1986, 100 Stat. 2462, 2465, 2478, 2480, 2483,
2877, 2963, added item 4972, inserted "section" in item 4973,
substituted "Excise tax on certain accumulations in qualified
retirement plans" for "Tax on certain accumulations in individual
retirement accounts" in item 4974, struck out "and allocations"
after "certain dispositions" in item 4978, and added items 4979,
4979A, 4980, and 4981A.
1984 - Pub. L. 98-369, div. A, title IV, Sec. 491(d)(56), title
V, Secs. 511(c)(2), 531(e)(2), 545(b), July 18, 1984, 98 Stat. 852,
862, 886, 896, substituted "and certain individual retirement
annuities" for "certain individual retirement annuities, and
certain retirement bonds" in item 4973 and added items 4976 to
4978.
1982 - Pub. L. 97-248, title II, Sec. 237(c)(2), Sept. 3, 1982,
96 Stat. 511, struck out item 4972 "Tax on excess contributions for
self-employed individuals".
1974 - Pub. L. 93-406, title II, Secs. 1013(b), 2001(f)(2),
2002(h)(3), Sept. 2, 1974, 88 Stat. 920, 957, 970, added chapter
heading and analysis of sections 4971 to 4975.
-SECREF-
CHAPTER REFERRED TO IN OTHER SECTIONS
This chapter is referred to in sections 275, 6161, 6201, 6211,
6212, 6213, 6214, 6344, 6405, 6501, 6512, 6862, 6871, 7422 of this
title.
-FOOTNOTE-
(!1) Section repealed by Pub. L. 105-34 without corresponding
amendment of chapter analysis.
-End-
-CITE-
26 USC Sec. 4971 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
Sec. 4971. Taxes on failure to meet minimum funding standards
-STATUTE-
(a) Initial tax
For each taxable year of an employer who maintains a plan to
which section 412 applies, there is hereby imposed a tax of 10
percent (5 percent in the case of a multiemployer plan) on the
amount of the accumulated funding deficiency under the plan,
determined as of the end of the plan year ending with or within
such taxable year.
(b) Additional tax
In any case in which an initial tax is imposed by subsection (a)
on an accumulated funding deficiency and such accumulated funding
deficiency is not corrected within the taxable period, there is
hereby imposed a tax equal to 100 percent of such accumulated
funding deficiency to the extent not corrected.
(c) Definitions
For purposes of this section -
(1) Accumulated funding deficiency
The term "accumulated funding deficiency" has the meaning given
to such term by the last two sentences of section 412(a).
(2) Correct
The term "correct" means, with respect to an accumulated
funding deficiency, the contribution, to or under the plan, of
the amount necessary to reduce such accumulated funding
deficiency as of the end of a plan year in which such deficiency
arose to zero.
(3) Taxable period
The term "taxable period" means, with respect to an accumulated
funding deficiency, the period beginning with the end of the plan
year in which there is an accumulated funding deficiency and
ending on the earlier of -
(A) the date of mailing of a notice of deficiency with
respect to the tax imposed by subsection (a), or
(B) the date on which the tax imposed by subsection (a) is
assessed.
(d) Notification of the Secretary of Labor
Before issuing a notice of deficiency with respect to the tax
imposed by subsection (a) or (b), the Secretary shall notify the
Secretary of Labor and provide him a reasonable opportunity (but
not more than 60 days) -
(1) to require the employer responsible for contributing to or
under the plan to eliminate the accumulated funding deficiency,
or
(2) to comment on the imposition of such tax.
In the case of a multiemployer plan which is in reorganization
under section 418, the same notice and opportunity shall be
provided to the Pension Benefit Guaranty Corporation.
(e) Liability for tax
(1) In general
Except as provided in paragraph (2), the tax imposed by
subsection (a), (b), or (f) shall be paid by the employer
responsible for contributing to or under the plan the amount
described in section 412(b)(3)(A).
(2) Joint and several liability where employer member of
controlled group
(A) In general
In the case of a plan other than a multiemployer plan, if the
employer referred to in paragraph (1) is a member of a
controlled group, each member of such group shall be jointly
and severally liable for the tax imposed by subsection (a),
(b), or (f).
(B) Controlled group
For purposes of subparagraph (A), the term "controlled group"
means any group treated as a single employer under subsection
(b), (c), (m), or (o) of section 414.
(f) Failure to pay liquidity shortfall
(1) In general
In the case of a plan to which section 412(m)(5) applies, there
is hereby imposed a tax of 10 percent of the excess (if any) of -
(A) the amount of the liquidity shortfall for any quarter,
over
(B) the amount of such shortfall which is paid by the
required installment under section 412(m) for such quarter (but
only if such installment is paid on or before the due date for
such installment).
(2) Additional tax
If the plan has a liquidity shortfall as of the close of any
quarter and as of the close of each of the following 4 quarters,
there is hereby imposed a tax equal to 100 percent of the amount
on which tax was imposed by paragraph (1) for such first quarter.
(3) Definitions and special rule
(A) Liquidity shortfall; quarter
For purposes of this subsection, the terms "liquidity
shortfall" and "quarter" have the respective meanings given
such terms by section 412(m)(5).
(B) Special rule
If the tax imposed by paragraph (2) is paid with respect to
any liquidity shortfall for any quarter, no further tax shall
be imposed by this subsection on such shortfall for such
quarter.
(4) Waiver by Secretary
If the taxpayer establishes to the satisfaction of the
Secretary that -
(A) the liquidity shortfall described in paragraph (1) was
due to reasonable cause and not willful neglect, and
(B) reasonable steps have been taken to remedy such liquidity
shortfall,
the Secretary may waive all or part of the tax imposed by this
subsection.
(g) Cross references
For disallowance of deduction for taxes paid under this
section, see section 275.
For liability for tax in case of an employer party to
collective bargaining agreement, see section 413(b)(6).
For provisions concerning notification of Secretary of Labor
of imposition of tax under this section, waiver of the tax
imposed by subsection (b), and other coordination between
Secretary of the Treasury and Secretary of Labor with respect
to compliance with this section, see section 3002(b) of title
III of the Employee Retirement Income Security Act of 1974.
-SOURCE-
(Added Pub. L. 93-406, title II, Sec. 1013(b), Sept. 2, 1974, 88
Stat. 920; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834; Pub. L. 96-364, title II, Sec. 204,
Sept. 26, 1980, 94 Stat. 1287; Pub. L. 96-596, Sec. 2(a)(1)(J),
(2)(H), Dec. 24, 1980, 94 Stat. 3469, 3471; Pub. L. 100-203, title
IX, Secs. 9304(c)(1), 9305(a), Dec. 22, 1987, 101 Stat. 1330-348,
1330-351; Pub. L. 103-465, title VII, Sec. 751(a)(9)(B), Dec. 8,
1994, 108 Stat. 5020; Pub. L. 104-188, title I, Sec. 1464(a), Aug.
20, 1996, 110 Stat. 1824.)
-REFTEXT-
REFERENCES IN TEXT
Section 3002(b) of title III of the Employee Retirement Income
Security Act of 1974, referred to in subsec. (g), is classified to
section 1202(b) of Title 29, Labor.
-MISC1-
AMENDMENTS
1996 - Subsec. (f)(4). Pub. L. 104-188 added par. (4).
1994 - Subsec. (e)(1), (2)(A). Pub. L. 103-465, Sec.
751(a)(9)(B)(i), substituted "(a), (b), or (f)" for "(a) or (b)".
Subsecs. (f), (g). Pub. L. 103-465, Sec. 751(a)(9)(B)(ii), added
subsec. (f) and redesignated former subsec. (f) as (g).
1987 - Subsec. (a). Pub. L. 100-203, Sec. 9305(a)(2)(A), struck
out at end "The tax imposed by this subsection shall be paid by the
employer responsible for contributing to or under the plan the
amount described in section 412(b)(3)(A)."
Pub. L. 100-203, Sec. 9304(c)(1), substituted "10 percent (5
percent in the case of a multiemployer plan)" for "5 percent".
Subsec. (b). Pub. L. 100-203, Sec. 9305(a)(2)(B), struck out at
end "The tax imposed by this subsection shall be paid by the
employer described in subsection (a)."
Subsecs. (e), (f). Pub. L. 100-203, Sec. 9305(a)(1), added
subsec. (e) and redesignated former subsec. (e) as (f).
1980 - Subsec. (b). Pub. L. 96-596, Sec. 2(a)(1)(J), substituted
"taxable period" for "correction period".
Subsec. (c)(1). Pub. L. 96-364, Sec. 204(1), substituted "last
two sentences" for "last sentence".
Subsec. (c)(3). Pub. L. 96-596, Sec. 2(a)(2)(H), substituted
provision defining taxable period as the period beginning with the
end of the plan year in which there is an accumulated funding
deficiency and ending on the earlier of the date of mailing of a
notice of deficiency with respect to the tax imposed by subsec. (a)
of this section or the date on which the tax imposed by subsec. (a)
of this section is assessed for provision defining correction
period as the period beginning with the end of a plan year in which
there is an accumulated funding deficiency and ending 90 days after
the date of mailing of a notice of deficiency under section 6212 of
this title with respect to the tax imposed by subsec. (b) of this
section, extended by any period in which a deficiency cannot be
assessed under section 6213(a) of this title and by any other
period which the Secretary determines reasonable and necessary to
permit a reduction of the accumulated funding deficiency to zero.
Subsec. (d). Pub. L. 96-364, Sec. 204(2), inserted provisions
relating to a multiemployer plan in reorganization.
1976 - Subsecs. (c), (d). Pub. L. 94-455 struck out "or his
delegate" after "Secretary" wherever appearing.
EFFECTIVE DATE OF 1996 AMENDMENT
Section 1464(b) of Pub. L. 104-188 provided that: "The amendment
made by this section [amending this section] shall take effect as
if included in the amendment made by clause (ii) of section
751(a)(9)(B) of the Retirement Protection Act of 1994 [Pub. L.
103-465] (108 Stat. 5020)."
EFFECTIVE DATE OF 1994 AMENDMENT
Amendment by Pub. L. 103-465 applicable to plan years beginning
after Dec. 31, 1994, see section 751(b)(1) of Pub. L. 103-465, set
out as a note under section 401 of this title.
EFFECTIVE DATE OF 1987 AMENDMENT
Section 9304(c)(2) of Pub. L. 100-203 provided that: "The
amendments made by this subsection [amending this section] shall
apply to plan years beginning after 1988."
Amendment by section 9305(a) of Pub. L. 100-203 applicable with
respect to plan years beginning after December 31, 1987, see
section 9305(d) of Pub. L. 100-203, set out as a note under section
412 of this title.
EFFECTIVE DATE OF 1980 AMENDMENTS
For effective date of amendment by Pub. L. 96-596 with respect to
any first tier tax and to any second tier tax, see section 2(d) of
Pub. L. 96-596, set out as an Effective Date note under section
4961 of this title.
Amendment by Pub. L. 96-364 effective Sept. 26, 1980, see section
210(a) of Pub. L. 96-364, set out as an Effective Date note under
section 418 of this title.
EFFECTIVE DATE
Section applicable, except as otherwise provided in section
1017(c) through (i) of Pub. L. 93-406, for plan years beginning
after Sept. 2, 1974, and, in the case of plans in existence on Jan.
1, 1974, for plan years beginning after Dec. 31, 1975, see section
1017 of Pub. L. 93-406, set out as an Effective Date; Transitional
Rules note under section 410 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1998
For provisions directing that if any amendments made by subtitle
D [Secs. 1401-1465] of title I of Pub. L. 104-188 require an
amendment to any plan or annuity contract, such amendment shall not
be required to be made before the first day of the first plan year
beginning on or after Jan. 1, 1998, see section 1465 of Pub. L.
104-188, set out as a note under section 401 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 413, 4963, 6503 of this
title.
-End-
-CITE-
26 USC Sec. 4972 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
Sec. 4972. Tax on nondeductible contributions to qualified employer
plans
-STATUTE-
(a) Tax imposed
In the case of any qualified employer plan, there is hereby
imposed a tax equal to 10 percent of the nondeductible
contributions under the plan (determined as of the close of the
taxable year of the employer).
(b) Employer liable for tax
The tax imposed by this section shall be paid by the employer
making the contributions.
(c) Nondeductible contributions
For purposes of this section -
(1) In general
The term "nondeductible contributions" means, with respect to
any qualified employer plan, the sum of -
(A) the excess (if any) of -
(i) the amount contributed for the taxable year by the
employer to or under such plan, over
(ii) the amount allowable as a deduction under section 404
for such contributions (determined without regard to
subsection (e) thereof), and
(B) the amount determined under this subsection for the
preceding taxable year reduced by the sum of -
(i) the portion of the amount so determined returned to the
employer during the taxable year, and
(ii) the portion of the amount so determined deductible
under section 404 for the taxable year (determined without
regard to subsection (e) thereof).
(2) Ordering rule for section 404
For purposes of paragraph (1), the amount allowable as a
deduction under section 404 for any taxable year shall be treated
as -
(A) first from carryforwards to such taxable year from
preceding taxable years (in order of time), and
(B) then from contributions made during such taxable year.
(3) Contributions which may be returned to employer
In determining the amount of nondeductible contributions for
any taxable year, there shall not be taken into account any
contribution for such taxable year which is distributed to the
employer in a distribution described in section 4980(c)(2)(B)(ii)
if such distribution is made on or before the last day on which a
contribution may be made for such taxable year under section
404(a)(6).
(4) Special rule for self-employed individuals
For purposes of paragraph (1), if -
(A) the amount which is required to be contributed to a plan
under section 412 on behalf of an individual who is an employee
(within the meaning of section 401(c)(1)), exceeds
(B) the earned income (within the meaning of section
404(a)(8)) of such individual derived from the trade or
business with respect to which such plan is established,
such excess shall be treated as an amount allowable as a
deduction under section 404.
(5) Pre-1987 contributions
The term "nondeductible contribution" shall not include any
contribution made for a taxable year beginning before January 1,
1987.
(6) Exceptions
In determining the amount of nondeductible contributions for
any taxable year, there shall not be taken into account -
(A) so much of the contributions to 1 or more defined
contribution plans which are not deductible when contributed
solely because of section 404(a)(7) as does not exceed the
greater of -
(i) the amount of contributions not in excess of 6 percent
of compensation (within the meaning of section 404(a) and as
adjusted under section 404(a)(12)) paid or accrued (during
the taxable year for which the contributions were made) to
beneficiaries under the plans, or
(ii) the sum of -
(I) the amount of contributions described in section
401(m)(4)(A), plus
(II) the amount of contributions described in section
402(g)(3)(A), or
(B) so much of the contributions to a simple retirement
account (within the meaning of section 408(p)) or a simple plan
(within the meaning of section 401(k)(11)) which are not
deductible when contributed solely because such contributions
are not made in connection with a trade or business of the
employer.
For purposes of subparagraph (A), the deductible limits under
section 404(a)(7) shall first be applied to amounts contributed
to a defined benefit plan and then to amounts described in
subparagraph (A). Subparagraph (B) shall not apply to
contributions made on behalf of the employer or a member of the
employer's family (as defined in section 447(e)(1)).
(7) Defined benefit plan exception
In determining the amount of nondeductible contributions for
any taxable year, an employer may elect for such year not to take
into account any contributions to a defined benefit plan except
to the extent that such contributions exceed the full-funding
limitation (as defined in section 412(c)(7), determined without
regard to subparagraph (A)(i)(I) thereof). For purposes of this
paragraph, the deductible limits under section 404(a)(7) shall
first be applied to amounts contributed to defined contribution
plans and then to amounts described in this paragraph. If an
employer makes an election under this paragraph for a taxable
year, paragraph (6) shall not apply to such employer for such
taxable year.
(d) Definitions
For purposes of this section -
(1) Qualified employer plan
(A) In general
The term "qualified employer plan" means -
(i) any plan meeting the requirements of section 401(a)
which includes a trust exempt from tax under section 501(a),
(ii) an annuity plan described in section 403(a),
(iii) any simplified employee pension (within the meaning
of section 408(k)), and
(iv) any simple retirement account (within the meaning of
section 408(p)).
(B) Exemption for governmental and tax exempt plans
The term "qualified employer plan" does not include a plan
described in subparagraph (A) or (B) of section 4980(c)(1).
(2) Employer
In the case of a plan which provides contributions or benefits
for employees some or all of whom are self-employed individuals
within the meaning of section 401(c)(1), the term "employer"
means the person treated as the employer under section 401(c)(4).
-SOURCE-
(Added Pub. L. 99-514, title XI, Sec. 1131(c)(1), Oct. 22, 1986,
100 Stat. 2477; amended Pub. L. 100-647, title I, Sec. 1011A(e)(1),
(2), title II, Sec. 2005(a)(1), Nov. 10, 1988, 102 Stat. 3477,
3610; Pub. L. 103-465, title VII, Sec. 755(a), Dec. 8, 1994, 108
Stat. 5023; Pub. L. 104-188, title I, Sec. 1421(b)(9)(D), Aug. 20,
1996, 110 Stat. 1798; Pub. L. 105-34, title XV, Sec. 1507(a), Aug.
5, 1997, 111 Stat. 1067; Pub. L. 107-16, title VI, Secs.
616(b)(2)(B), 637(a), (b), 652(b), 653(a), June 7, 2001, 115 Stat.
103, 118, 130.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
PRIOR PROVISIONS
A prior section, added Pub. L. 93-406, title II, Sec. 2001(f)(1),
Sept. 2, 1974, 88 Stat. 955; amended Pub. L. 94-455, title XIX,
Sec. 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 97-34,
title III, Sec. 312(e)(3), Aug. 13, 1981, 95 Stat. 285; Pub. L.
97-448, title I, Sec. 103(c)(10)(B), Jan. 12, 1983, 96 Stat. 2377;
Pub. L. 98-369, div. A, title IV, Sec. 491(d)(40), July 18, 1984,
98 Stat. 851, related to tax on excess contributions for
self-employed individuals, prior to repeal applicable to years
beginning after Dec. 31, 1983, by Pub. L. 97-248, title II, Sec.
237(c)(1), Sept. 3, 1982, 96 Stat. 511.
AMENDMENTS
2001 - Subsec. (c)(6). Pub. L. 107-16, Secs. 652(b)(4), 901,
temporarily substituted "Subparagraph (B)" for "Subparagraph (C)"
in concluding provisions. See Effective and Termination Dates of
2001 Amendment note below.
Pub. L. 107-16, Secs. 652(b)(3), 901, which directed the
temporary substitution of "subparagraph (A)" for "subparagraph (B)"
in concluding provisions, was executed by making the substitution
in two places, to reflect the probable intent of Congress. See
Effective and Termination Dates of 2001 Amendment note below.
Pub. L. 107-16, Secs. 652(b)(2), 901, in concluding provisions,
temporarily struck out first sentence which read as follows: "If 1
or more defined benefit plans were taken into account in
determining the amount allowable as a deduction under section 404
for contributions to any defined contribution plan, subparagraph
(B) shall apply only if such defined benefit plans are described in
section 404(a)(1)(D)." See Effective and Termination Dates of 2001
Amendment note below.
Pub. L. 107-16, Secs. 637(b), 901, in concluding provisions,
temporarily inserted at end "Subparagraph (C) shall not apply to
contributions made on behalf of the employer or a member of the
employer's family (as defined in section 447(e)(1))." See Effective
and Termination Dates of 2001 Amendment note below.
Subsec. (c)(6)(A). Pub. L. 107-16, Secs. 652(b)(1), 901,
temporarily redesignated subpar. (B) as (A) and struck out former
subpar. (A) which read as follows: "contributions that would be
deductible under section 404(a)(1)(D) if the plan had more than 100
participants if -
"(i) the plan is covered under section 4021 of the Employee
Retirement Income Security Act of 1974, and
"(ii) the plan is terminated under section 4041(b) of such Act
on or before the last day of the taxable year,".
See Effective and Termination Dates of 2001 Amendment note below.
Pub. L. 107-16, Secs. 637(a), 901, temporarily struck out "and"
at end. See Effective and Termination Dates of 2001 Amendment note
below.
Subsec. (c)(6)(B). Pub. L. 107-16, Secs. 652(b)(1), 901,
temporarily redesignated subpar. (C) as (B). Former subpar. (B)
redesignated (A). See Effective and Termination Dates of 2001
Amendment note below.
Pub. L. 107-16, Secs. 637(a), 901, temporarily substituted ", or"
for period at end. See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (c)(6)(B)(i). Pub. L. 107-16, Secs. 616(b)(2)(B), 901,
temporarily substituted "(within the meaning of section 404(a) and
as adjusted under section 404(a)(12))" for "(within the meaning of
section 404(a))". See Effective and Termination Dates of 2001
Amendment note below.
Subsec. (c)(6)(C). Pub. L. 107-16, Secs. 652(b)(1), 901,
temporarily redesignated subpar. (C) as (B). See Effective and
Termination Dates of 2001 Amendment note below.
Pub. L. 107-16, Secs. 637(a), 901, temporarily added subpar. (C).
See Effective and Termination Dates of 2001 Amendment note below.
Subsec. (c)(7). Pub. L. 107-16, Secs. 653(a), 901, temporarily
added par. (7). See Effective and Termination Dates of 2001
Amendment note below.
1997 - Subsec. (c)(6)(B). Pub. L. 105-34 amended subpar. (B)
generally. Prior to amendment, subpar. (B) read as follows:
"contributions to 1 or more defined contribution plans which are
not deductible when contributed solely because of section
404(a)(7), but only to the extent such contributions do not exceed
6 percent of compensation (within the meaning of section 404(a))
paid or accrued (during the taxable year for which the
contributions were made) to beneficiaries under the plans."
1996 - Subsec. (d)(1)(A)(iv). Pub. L. 104-188 added cl. (iv).
1994 - Subsec. (c)(6). Pub. L. 103-465 added par. (6).
1988 - Subsec. (c). Pub. L. 100-647, Sec. 1011A(e)(1), amended
subsec. (c) generally, revising and restating as pars. (1) to (4)
provisions of former pars. (1) and (2).
Subsec. (c)(4), (5). Pub. L. 100-647, Sec. 2005(a)(1), added par.
(4) and redesignated former par. (4) as (5).
Subsec. (d)(1). Pub. L. 100-647, Sec. 1011A(e)(2), amended par.
(1) generally. Prior to amendment, par. (1) read as follows: "The
term 'qualified employer plan' means -
"(A) any plan meeting the requirements of section 401(a) which
includes a trust exempt from the tax under section 501(a),
"(B) an annuity plan described in section 403(a), and
"(C) any simplified employee pension (within the meaning of
section 408(k))."
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENT
Amendment by section 616(b)(2)(B) of Pub. L. 107-16 applicable to
years beginning after Dec. 31, 2001, see section 616(c) of Pub. L.
107-16, set out as a note under section 404 of this title.
Pub. L. 107-16, title VI, Sec. 637(d), June 7, 2001, 115 Stat.
118, provided that: "The amendments made by this section [amending
this section] shall apply to taxable years beginning after December
31, 2001."
Amendment by section 652(b) of Pub. L. 107-16 applicable to plan
years beginning after Dec. 31, 2001, see section 652(c) of Pub. L.
107-16, set out as a note under section 404 of this title.
Pub. L. 107-16, title VI, Sec. 653(b), June 7, 2001, 115 Stat.
130, provided that: "The amendment made by this section [amending
this section] shall apply to years beginning after December 31,
2001."
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENT
Section 1507(b) of Pub. L. 105-34 provided that: "The amendments
made by this section [amending this section] shall apply to taxable
years beginning after December 31, 1997."
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-188 applicable to taxable years
beginning after Dec. 31, 1996, see section 1421(e) of Pub. L.
104-188, set out as a note under section 72 of this title.
EFFECTIVE DATE OF 1994 AMENDMENT
Section 755(b) of Pub. L. 103-465 provided that:
"(1) Section 4972(c)(6)(a). - Section 4972(c)(6)(A) of the
Internal Revenue Code of 1986 (as added by this section) shall
apply to taxable years ending on or after the date of enactment of
this Act [Dec. 8, 1994].
"(2) Section 4972(c)(6)(b). - Section 4972(c)(6)(B) of such Code
(as added by this section) shall apply to taxable years ending on
or after December 31, 1992."
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 1011A(e)(1), (2) of Pub. L. 100-647
effective, except as otherwise provided, as if included in the
provision of the Tax Reform Act of 1986, Pub. L. 99-514, to which
such amendment relates, see section 1019(a) of Pub. L. 100-647, set
out as a note under section 1 of this title.
Amendment by section 2005(a)(1) of Pub. L. 100-647 effective as
if included in the amendment made by section 1131(c) of Pub. L.
99-514, see section 2005(e) of Pub. L. 100-647, as amended, set out
as a note under section 404 of this title.
EFFECTIVE DATE
Section applicable to taxable years beginning after Dec. 31,
1986, with special rules in case of plans maintained pursuant to
collective bargaining agreements, see section 1131(d) of Pub. L.
99-514, as amended, set out as an Effective Date of 1986 Amendment
note under section 404 of this title.
CONSTRUCTION OF 2001 AMENDMENT
Pub. L. 107-16, title VI, Sec. 637(c), June 7, 2001, 115 Stat.
118, provided that: "Nothing in the amendments made by this section
[amending this section] shall be construed to infer the proper
treatment of nondeductible contributions under the laws in effect
before such amendments."
INCREASE IN AMOUNT FOR PLAN TERMINATION INSURANCE UNDER EMPLOYEE
RETIREMENT INSURANCE SECURITY ACT OF 1974
Section 1011A(e)(5) of Pub. L. 100-647 provided that: "In the
case of any taxable year beginning in 1987, the amount under
section 4972(c)(1)(A)(ii) of the 1986 Code for a plan to which
title IV of the Employee Retirement Income Security Act of 1974 [29
U.S.C. 1301 et seq.] applies shall be increased by the amount (if
any) by which, as of the close of the plan year with or within
which such taxable year begins -
"(A) the liabilities of such plan (determined as if the plan
had terminated as of such time), exceed
"(B) the assets of such plan."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1998
For provisions directing that if any amendments made by subtitle
D [Secs. 1401-1465] of title I of Pub. L. 104-188 require an
amendment to any plan or annuity contract, such amendment shall not
be required to be made before the first day of the first plan year
beginning on or after Jan. 1, 1998, see section 1465 of Pub. L.
104-188, set out as a note under section 401 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 45E of this title.
-End-
-CITE-
26 USC Sec. 4973 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
Sec. 4973. Tax on excess contributions to certain tax-favored
accounts and annuities
-STATUTE-
(a) Tax imposed
In the case of -
(1) an individual retirement account (within the meaning of
section 408(a)),
(2) an Archer MSA (within the meaning of section 220(d)),
(3) an individual retirement annuity (within the meaning of
section 408(b)), a custodial account treated as an annuity
contract under section 403(b)(7)(A) (relating to custodial
accounts for regulated investment company stock),
(4) a Coverdell education savings account (as defined in
section 530), or
(5) a health savings account (within the meaning of section
223(d)),
there is imposed for each taxable year a tax in an amount equal to
6 percent of the amount of the excess contributions to such
individual's accounts or annuities (determined as of the close of
the taxable year). The amount of such tax for any taxable year
shall not exceed 6 percent of the value of the account or annuity
(determined as of the close of the taxable year). In the case of an
endowment contract described in section 408(b), the tax imposed by
this section does not apply to any amount allocable to life,
health, accident, or other insurance under such contract. The tax
imposed by this subsection shall be paid by such individual.
(b) Excess contributions
For purposes of this section, in the case of individual
retirement accounts or individual retirement annuities, the term
"excess contributions" means the sum of -
(1) the excess (if any) of -
(A) the amount contributed for the taxable year to the
accounts or for the annuities (other than a contribution to a
Roth IRA or a rollover contribution described in section
402(c), 403(a)(4), 403(b)(8), 408(d)(3), or 457(e)(16)), over
(B) the amount allowable as a deduction under section 219 for
such contributions, and
(2) the amount determined under this subsection for the
preceding taxable year reduced by the sum of -
(A) the distributions out of the account for the taxable year
which were included in the gross income of the payee under
section 408(d)(1),
(B) the distributions out of the account for the taxable year
to which section 408(d)(5) applies, and
(C) the excess (if any) of the maximum amount allowable as a
deduction under section 219 for the taxable year over the
amount contributed (determined without regard to section
219(f)(6)) to the accounts or for the annuities (including the
amount contributed to a Roth IRA) for the taxable year.
For purposes of this subsection, any contribution which is
distributed from the individual retirement account or the
individual retirement annuity in a distribution to which section
408(d)(4) applies shall be treated as an amount not contributed.
For purposes of paragraphs (1)(B) and (2)(C), the amount allowable
as a deduction under section 219 shall be computed without regard
to section 219(g).
(c) Section 403(b) contracts
For purposes of this section, in the case of a custodial account
referred to in subsection (a)(2), the term "excess contributions"
means the sum of -
(1) the excess (if any) of the amount contributed for the
taxable year to such account (other than a rollover contribution
described in section 403(b)(8) or 408(d)(3)(A)(iii)), over the
lesser of the amount excludable from gross income under section
403(b) or the amount permitted to be contributed under the
limitations contained in section 415 (or under whichever such
section is applicable, if only one is applicable), and
(2) the amount determined under this subsection for the
preceding taxable year, reduced by -
(A) the excess (if any) of the lesser of (i) the amount
excludable from gross income under section 403(b) or (ii) the
amount permitted to be contributed under the limitations
contained in section 415 over the amount contributed to the
account for the taxable year (or under whichever such section
is applicable, if only one is applicable), and
(B) the sum of the distributions out of the account (for all
prior taxable years) which are included in gross income under
section 72(e).
(d) Excess contributions to Archer MSAs
For purposes of this section, in the case of Archer MSAs (within
the meaning of section 220(d)), the term "excess contributions"
means the sum of -
(1) the aggregate amount contributed for the taxable year to
the accounts (other than rollover contributions described in
section 220(f)(5)) which is neither excludable from gross income
under section 106(b) nor allowable as a deduction under section
220 for such year, and
(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of -
(A) the distributions out of the accounts which were included
in gross income under section 220(f)(2), and
(B) the excess (if any) of -
(i) the maximum amount allowable as a deduction under
section 220(b)(1) (determined without regard to section
106(b)) for the taxable year, over
(ii) the amount contributed to the accounts for the taxable
year.
For purposes of this subsection, any contribution which is
distributed out of the Archer MSA in a distribution to which
section 220(f)(3) or section 138(c)(3) applies shall be treated as
an amount not contributed.
(e) Excess contributions to Coverdell education savings accounts
For purposes of this section -
(1) In general
In the case of Coverdell education savings accounts maintained
for the benefit of any one beneficiary, the term "excess
contributions" means the sum of -
(A) the amount by which the amount contributed for the
taxable year to such accounts exceeds $2,000 (or, if less, the
sum of the maximum amounts permitted to be contributed under
section 530(c) by the contributors to such accounts for such
year); and
(B) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of -
(i) the distributions out of the accounts for the taxable
year (other than rollover distributions); and
(ii) the excess (if any) of the maximum amount which may be
contributed to the accounts for the taxable year over the
amount contributed to the accounts for the taxable year.
(2) Special rules
For purposes of paragraph (1), the following contributions
shall not be taken into account:
(A) Any contribution which is distributed out of the
Coverdell education savings account in a distribution to which
section 530(d)(4)(C) applies.
(B) Any rollover contribution.
(f) Excess contributions to Roth IRAs
For purposes of this section, in the case of contributions to a
Roth IRA (within the meaning of section 408A(b)), the term "excess
contributions" means the sum of -
(1) the excess (if any) of -
(A) the amount contributed for the taxable year to Roth IRAs
(other than a qualified rollover contribution described in
section 408A(e)), over
(B) the amount allowable as a contribution under sections
408A(c)(2) and (c)(3), and
(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of -
(A) the distributions out of the accounts for the taxable
year, and
(B) the excess (if any) of the maximum amount allowable as a
contribution under sections 408A(c)(2) and (c)(3) for the
taxable year over the amount contributed by the individual to
all individual retirement plans for the taxable year.
For purposes of this subsection, any contribution which is
distributed from a Roth IRA in a distribution described in section
408(d)(4) shall be treated as an amount not contributed.
(g) Excess contributions to health savings accounts
For purposes of this section, in the case of health savings
accounts (within the meaning of section 223(d)), the term "excess
contributions" means the sum of -
(1) the aggregate amount contributed for the taxable year to
the accounts (other than a rollover contribution described in
section 220(f)(5) or 223(f)(5)) which is neither excludable from
gross income under section 106(d) nor allowable as a deduction
under section 223 for such year, and
(2) the amount determined under this subsection for the
preceding taxable year, reduced by the sum of -
(A) the distributions out of the accounts which were included
in gross income under section 223(f)(2), and
(B) the excess (if any) of -
(i) the maximum amount allowable as a deduction under
section 223(b) (determined without regard to section 106(d))
for the taxable year, over
(ii) the amount contributed to the accounts for the taxable
year.
For purposes of this subsection, any contribution which is
distributed out of the health savings account in a distribution to
which section 223(f)(3) applies shall be treated as an amount not
contributed.
-SOURCE-
(Added Pub. L. 93-406, title II, Sec. 2002(d), Sept. 2, 1974, 88
Stat. 966; amended Pub. L. 94-455, title XV, Sec. 1501(b)(8), title
XIX, Sec. 1904(a)(22), Oct. 4, 1976, 90 Stat. 1736, 1814; Pub. L.
95-600, title I, Secs. 156(c)(3), (5), 157(b)(3), (j)(1), title
VII, Sec. 701(aa)(1), Nov. 6, 1978, 92 Stat. 2803, 2804, 2809,
2921; Pub. L. 96-222, title I, Sec. 101(a)(13)(C), (14)(B), Apr. 1,
1980, 94 Stat. 204; Pub. L. 97-34, title III, Secs. 311(h)(7), (9),
(10), 313(b)(2), Aug. 13, 1981, 95 Stat. 282, 286; Pub. L. 98-369,
div. A, title IV, Sec. 491(d)(41)-(44), (55), July 18, 1984, 98
Stat. 851, 852; Pub. L. 99-514, title XI, Sec. 1102(b)(1), title
XVIII, Sec. 1848(f), Oct. 22, 1986, 100 Stat. 2415, 2858; Pub. L.
100-647, title I, Sec. 1011(b)(3), Nov. 10, 1988, 102 Stat. 3456;
Pub. L. 102-318, title V, Sec. 521(b)(41), July 3, 1992, 106 Stat.
313; Pub. L. 104-188, title I, Sec. 1704(t)(70), (72), Aug. 20,
1996, 110 Stat. 1891; Pub. L. 104-191, title III, Sec. 301(e), Aug.
21, 1996, 110 Stat. 2051; Pub. L. 105-33, title IV, Sec.
4006(b)(1), Aug. 5, 1997, 111 Stat. 333; Pub. L. 105-34, title II,
Sec. 213(d), title III, Sec. 302(b), Aug. 5, 1997, 111 Stat. 817,
828; Pub. L. 105-206, title VI, Secs. 6004(d)(10), 6005(b)(8),
6023(18)(A), July 22, 1998, 112 Stat. 795, 799, 825; Pub. L.
106-554, Sec. 1(a)(7) [title II, Sec. 202(a)(6), (b)(2)(C), (6),
(10)], Dec. 21, 2000, 114 Stat. 2763, 2763A-628, 2763A-629; Pub. L.
107-16, title IV, Secs. 401(a)(2), (g)(2)(D), 402(a)(4)(A), title
VI, Sec. 641(e)(11), June 7, 2001, 115 Stat. 57, 60, 121; Pub. L.
107-22, Sec. 1(b)(1)(C), (2)(B), (4), July 26, 2001, 115 Stat. 197;
Pub. L. 108-173, title XII, Sec. 1201(e), Dec. 8, 2003, 117 Stat.
2478.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-MISC1-
AMENDMENTS
2003 - Subsec. (a)(5). Pub. L. 108-173, Sec. 1201(e)(1), added
par. (5).
Subsec. (g). Pub. L. 108-173, Sec. 1201(e)(2), added subsec. (g).
2001 - Subsec. (a)(4). Pub. L. 107-22, Sec. 1(b)(1)(C),
substituted "a Coverdell education savings" for "an education
individual retirement".
Subsec. (b)(1)(A). Pub. L. 107-16, Secs. 641(e)(11), 901,
temporarily substituted "408(d)(3), or 457(e)(16)" for "or
408(d)(3)". See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (e). Pub. L. 107-22, Sec. 1(b)(4), substituted "Coverdell
education savings" for "education individual retirement" in
heading.
Pub. L. 107-16, Secs. 402(a)(4)(A), 901, which directed the
temporary substitution of "qualified tuition" for "qualified State
tuition" wherever appearing in subsec. (e), could not be executed
because the term "qualified State tuition" did not appear
subsequent to amendment by section 401(g)(2)(D) of Pub. L. 107-16,
which struck out par. (1)(B). See below, and see Effective and
Termination Dates of 2001 Amendment note below.
Subsec. (e)(1). Pub. L. 107-22, Sec. 1(b)(2)(B), substituted
"Coverdell education savings" for "education individual retirement"
in introductory provisions.
Subsec. (e)(1)(A). Pub. L. 107-16, Secs. 401(a)(2), (g)(2)(D),
901, temporarily substituted "$2,000" for "$500" and inserted "and"
at end. See Effective and Termination Dates of 2001 Amendment note
below.
Subsec. (e)(1)(B), (C). Pub. L. 107-16, Secs. 401(g)(2)(D), 901,
temporarily redesignated subpar. (C) as (B) and struck out former
subpar. (B) which read as follows: "if any amount is contributed
(other than a contribution described in section 530(b)(2)(B))
during such year to a qualified State tuition program for the
benefit of such beneficiary, any amount contributed to such
accounts for such taxable year; and". See Effective and Termination
Dates of 2001 Amendment note below.
Subsec. (e)(2)(A). Pub. L. 107-22, Sec. 1(b)(2)(B), substituted
"Coverdell education savings" for "education individual
retirement".
2000 - Subsec. (a)(2). Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(b)(10)], substituted "an Archer" for "a Archer".
Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec. 202(a)(6)],
substituted "Archer MSA" for "medical savings account".
Subsec. (d). Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec.
202(a)(6), (b)(2)(C), (6)], substituted "Archer MSAs" for "medical
savings accounts" in heading, "Archer MSAs" for "medical savings
accounts" in introductory provisions, and "Archer MSA" for "medical
savings account" in concluding provisions.
1998 - Pub. L. 105-206, Sec. 6023(18)(A), amended section
catchline generally. Prior to amendment, catchline read as follows:
"Tax on excess contributions to individual retirement accounts,
medical savings accounts, certain section 403(b) contracts, and
certain individual retirement annuities".
Subsec. (b)(1)(A). Pub. L. 105-206, Sec. 6005(b)(8)(B)(i),
inserted "a contribution to a Roth IRA or" after "other than".
Subsec. (b)(2)(C). Pub. L. 105-206, Sec. 6005(b)(8)(B)(ii),
inserted "(including the amount contributed to a Roth IRA)" after
"annuities".
Subsec. (e)(1). Pub. L. 105-206, Sec. 6004(d)(10)(A), reenacted
heading without change and amended text of par. (1) generally.
Prior to amendment, text read as follows: "In the case of education
individual retirement accounts maintained for the benefit of any 1
beneficiary, the term 'excess contributions' means -
"(A) the amount by which the amount contributed for the taxable
year to such accounts exceeds $500, and
"(B) any amount contributed to such accounts for any taxable
year if any amount is contributed during such year to a qualified
State tuition program for the benefit of such beneficiary."
Subsec. (e)(2)(B), (C). Pub. L. 105-206, Sec. 6004(d)(10)(B),
redesignated subpar. (C) as (B) and struck out former subpar. (B)
which read as follows: "Any contribution described in section
530(b)(2)(B) to a qualified State tuition program."
Subsec. (f). Pub. L. 105-206, Sec. 6005(b)(8)(C), made technical
amendment to directory language of Pub. L. 105-34, Sec. 302(b). See
1997 Amendment note below.
Subsec. (f)(1)(A). Pub. L. 105-206, Sec. 6005(b)(8)(A)(i),
substituted "Roth IRAs" for "such accounts".
Subsec. (f)(2)(B). Pub. L. 105-206, Sec. 6005(b)(8)(A)(ii),
substituted "by the individual to all individual retirement plans"
for "to the accounts".
1997 - Subsec. (a)(4). Pub. L. 105-34, Sec. 213(d)(1), added par.
(4).
Subsec. (d). Pub. L. 105-33 inserted "or section 138(c)(3)" after
"section 220(f)(3)" in concluding provisions.
Subsec. (e). Pub. L. 105-34, Sec. 213(d)(2), added subsec. (e).
Subsec. (f). Pub. L. 105-34, Sec. 302(b), as amended by Pub. L.
105-206, Sec. 6005(b)(8)(C), added subsec. (f).
1996 - Pub. L. 104-191, Sec. 301(e)(1), inserted "medical savings
accounts," after "accounts," in section catchline.
Subsec. (a). Pub. L. 104-191, Sec. 301(e)(1)-(3), struck out "or"
at end of par. (1), added par. (2), and redesignated former par.
(2) as (3).
Subsec. (b)(1)(A). Pub. L. 104-188, Sec. 1704(t)(72), provided
that section 521(b)(41) of Pub. L. 102-318 shall be applied as if
"section" appeared instead of "sections" in the material proposed
to be stricken. See 1992 Amendment note below.
Pub. L. 104-188, Sec. 1704(t)(70), substituted "section" for
"sections".
Subsec. (d). Pub. L. 104-191, Sec. 301(e)(4), added subsec. (d).
1992 - Subsec. (b)(1)(A). Pub. L. 102-318, which directed the
substitution of "sections 402(c)" for "sections 402(a)(5),
402(a)(7)", was executed by substituting "sections 402(c)" for
"section 402(a)(5), 402(a)(7)". See 1996 Amendment note above.
1988 - Subsec. (b). Pub. L. 100-647 substituted "shall be
computed without regard to section 219(g)" for "(after application
of section 408(o)(2)(B)(ii)) shall be increased by the
nondeductible limit under section 408(o)(2)(B)" in last sentence.
1986 - Subsec. (b). Pub. L. 99-514, Sec. 1102(b)(1), inserted at
end "For purposes of paragraphs (1)(B) and (2)(C), the amount
allowable as a deduction under section 219 (after application of
section 408(o)(2)(B)(ii)) shall be increased by the nondeductible
limit under section 408(o)(2)(B)."
Pub. L. 99-514, Sec. 1848(f), in introductory provisions,
substituted "or individual retirement annuities" for ", individual
retirement annuities, or bonds", in par. (1)(A), substituted
"(other than a rollover contribution described in section
402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), or 408(d)(3)), over"
for "or bonds (other than a rollover contribution described in
section 402(a)(5), 402(a)(7), 403(a)(4), 403(b)(8), 405(d)(3), or
408(d)(3)), over", and in par. (2)(A), struck out "or bonds" after
"for the annuities".
1984 - Pub. L. 98-369, Sec. 491(d)(55), substituted "and certain
individual retirement annuities" for "certain individual retirement
annuities, and certain retirement bonds" in section catchline.
Subsec. (a). Pub. L. 98-369, Sec. 491(d)(41), inserted "or" at
end of par. (1), struck out "or" at end of par. (2), struck out
par. (3) which imposed a tax in the case of a retirement bond,
within the meaning of section 409, established for the benefit of
any individual, and in the concluding provision substituted "or
annuity" for ", annuity, or bond" and "or annuities" for ",
annuities, or bonds".
Subsec. (b). Pub. L. 98-369, Sec. 491(d)(43), substituted in
provision following par. (2)(C) "or the individual retirement
annuity" for ", individual retirement annuity, or bond".
Subsec. (b)(1)(A). Pub. L. 98-369, Sec. 491(d)(42), which
directed the amendment of subpar. (A) by substituting "and
408(d)(3)" for "408(d)(3), and 409(b)(3)(C)" was executed, as the
probable intent of Congress, by substituting "or 408(d)(3))" for
"408(d)(3)), or 409(b)(3)(C)".
Subsec. (c)(1). Pub. L. 98-369, Sec. 491(d)(44), substituted "or
408(d)(3)(A)(iii)" for ", 408(d)(3)(A)(iii), or 409(b)(3)(C)".
1981 - Subsec. (a). Pub. L. 97-34, Sec. 311(h)(9), substituted
"The tax imposed by this subsection shall be paid by such
individual" for "The tax imposed by this subsection shall be paid
by the individual to whom a deduction is allowed for the taxable
year under section 219 (determined without regard to subsection
(b)(1) thereof) or section 220 (determined without regard to
subsection (b)(1) thereof), whichever is appropriate".
Subsec. (b)(1)(A). Pub. L. 97-34, Sec. 313(b)(2), inserted
"405(d)(3)," after "403(b)(8),".
Subsec. (b)(1)(B). Pub. L. 97-34, Sec. 311(h)(7), substituted
"section 219" for "section 219 or 220".
Subsec. (b)(2)(C). Pub. L. 97-34, Sec. 311(h)(7), (10),
substituted "section 219" for "section 219 or 220", and "section
219(f)(6)" for "sections 219(c)(5) and 220(c)(6)".
1980 - Subsec. (b)(1)(A). Pub. L. 96-222, Sec. 101(a)(14)(B),
inserted reference to section 402(a)(7).
Subsec. (c)(1). Pub. L. 96-222, Sec. 101(a)(13)(C), substituted
"409(b)(3)(C)" for "409(d)(3)(C)".
1978 - Subsec. (b)(1)(A). Pub. L. 95-600, Sec. 156(c)(3),
inserted reference to section 403(b)(8).
Subsec. (b)(2). Pub. L. 95-600, Sec. 157(b)(3), substituted
"reduced by the sum of - " for "reduced by the excess (if any) of",
struck out "the maximum amount allowable as a deduction under
section 219 or 220 for the taxable year over the amount contributed
to the accounts or for the annuities or bonds for the taxable years
and reduced by the sum of the distributions out of the account (for
the taxable year and all prior taxable years) which were included
in the gross income of the payee under section 408(d)(1)" in
provision preceding par. (A), and added subpars. (A), (B), and (C).
Subsec. (b). Pub. L. 95-600, Secs. 157(j)(1), 701(aa)(1), struck
out in last sentence "if such distribution consists of an excess
contribution solely because of employer contributions to a plan or
contract described in section 219(b)(2) or by reason of the
application of section 219(b)(1) (without regard to the $1,500
limitation) or section 220(b)(1) (without regard to the $1,750
limitation) and only if such distribution does not exceed the
excess of $1,500 or $1,750 if applicable, over the amount described
in paragraph (1)(B)" after "as an amount not contributed".
Subsec. (c)(1). Pub. L. 95-600, Sec. 156(c)(5), inserted "(other
than a rollover contribution described in section 403(b)(8),
408(d)(3)(A)(iii), or 409(d)(3)(C))" after "account".
1976 - Subsec. (a)(3). Pub. L. 94-455, Secs. 1501(b)(8)(A),
1904(a)(22)(A), substituted "the individual to whom a deduction is
allowed for the taxable year under section 219 (determined without
regard to subsection (b)(1) thereof) or section 220 (determined
without regard to subsection (b)(1) thereof), whichever is
appropriate" for "such individual", effective for taxable years
beginning after December 31, 1976 and substituted "such individual"
for "the individual to whom a deduction is allowed for the taxable
year under section 219 (determined without regard to subsection
(b)(1) thereof) or section 220 (determined without regard to
subsection (b)(1) thereof), whichever is appropriate", effective
for the first day of the first month which begins more than 90 days
after Oct. 4, 1976.
Subsec. (b)(1)(B). Pub. L. 94-455, Sec. 1501(b)(8)(B), inserted
"or 220" after "under section 219".
Subsec. (b)(2). Pub. L. 94-455, Sec. 1501(b)(8)(C), inserted "or
220" after "under section 219" and "the taxable year and" before
"all prior taxable years" and struck out provisions relating to the
treatment of contributions out of individual retirement accounts,
annuities or bonds to which section 408(d)(4) applied.
Subsec. (c). Pub. L. 94-455, Sec. 1904(a)(22)(B), substituted
"subsection (a)(2)" for "subsection (a)(3)" in provisions preceding
par. (1).
EFFECTIVE DATE OF 2003 AMENDMENT
Amendment by Pub. L. 108-173 applicable to taxable years
beginning after Dec. 31, 2003, see section 1201(k) of Pub. L.
108-173, set out as a note under section 62 of this title.
EFFECTIVE AND TERMINATION DATES OF 2001 AMENDMENTS
Amendment by Pub. L. 107-22 effective July 26, 2001, see section
1(c) of Pub. L. 107-22, set out as a note under section 26 of this
title.
Amendment by section 401(a)(2), (g)(2)(D) of Pub. L. 107-16
applicable to taxable years beginning after Dec. 31, 2001, see
section 401(h) of Pub. L. 107-16, set out as a note under section
25A of this title.
Amendment by section 402(a)(4)(A) of Pub. L. 107-16 applicable to
taxable years beginning after Dec. 31, 2001, see section 402(h) of
Pub. L. 107-16, set out as a note under section 72 of this title.
Amendment by section 641(e)(11) of Pub. L. 107-16 applicable to
distributions after Dec. 31, 2001, see section 641(f)(1) of Pub. L.
107-16, set out as a note under section 402 of this title.
Amendment by Pub. L. 107-16 inapplicable to taxable, plan, or
limitation years beginning after Dec. 31, 2010, and the Internal
Revenue Code of 1986 to be applied and administered to such years
as if such amendment had never been enacted, see section 901 of
Pub. L. 107-16, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1998 AMENDMENT
Amendment by section 6023(18)(A) of Pub. L. 105-206 effective
July 22, 1998, see section 6023(32) of Pub. L. 105-206, set out as
a note under section 34 of this title.
Amendment by sections 6004(d)(10) and 6005(b)(8) of Pub. L.
105-206 effective, except as otherwise provided, as if included in
the provisions of the Taxpayer Relief Act of 1997, Pub. L. 105-34,
to which such amendment relates, see section 6024 of Pub. L.
105-206, set out as a note under section 1 of this title.
EFFECTIVE DATE OF 1997 AMENDMENTS
Amendment by section 213(d) of Pub. L. 105-34 applicable to
taxable years beginning after Dec. 31, 1997, see section 213(f) of
Pub. L. 105-34, set out as a note under section 26 of this title.
Amendment by section 302(b) of Pub. L. 105-34 applicable to
taxable years beginning after Dec. 31, 1997, see section 302(f) of
Pub. L. 105-34, set out as a note under section 219 of this title.
Amendment by Pub. L. 105-33 applicable to taxable years beginning
after Dec. 31, 1998, see section 4006(c) of Pub. L. 105-33, set out
as an Effective Date note under section 138 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT
Amendment by Pub. L. 104-191 applicable to taxable years
beginning after Dec. 31, 1996, see section 301(j) of Pub. L.
104-191, set out as a note under section 62 of this title.
EFFECTIVE DATE OF 1992 AMENDMENT
Amendment by Pub. L. 102-318 applicable to distributions after
Dec. 31, 1992, see section 521(e) of Pub. L. 102-318, set out as a
note under section 402 of this title.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100-647 effective, except as otherwise
provided, as if included in the provision of the Tax Reform Act of
1986, Pub. L. 99-514, to which such amendment relates, see section
1019(a) of Pub. L. 100-647, set out as a note under section 1 of
this title.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 1102(b)(1) of Pub. L. 99-514 applicable to
contributions and distributions for taxable years beginning after
Dec. 31, 1986, see section 1102(g) of Pub. L. 99-514, set out as a
note under section 219 of this title.
Amendment by section 1848(f) of Pub. L. 99-514 effective, except
as otherwise provided, as if included in the provisions of the Tax
Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment
relates, see section 1881 of Pub. L. 99-514, set out as a note
under section 48 of this title.
EFFECTIVE DATE OF 1984 AMENDMENT
Amendment by Pub. L. 98-369 applicable to obligations issued
after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98-369, set
out as a note under section 62 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by section 311(h)(7), (9), (10) of Pub. L. 97-34
applicable to taxable years beginning after Dec. 31, 1981, see
section 311(i)(1) of Pub. L. 97-34, set out as a note under section
219 of this title.
Amendment by section 313(b)(2) of Pub. L. 97-34 applicable to
redemptions after Aug. 13, 1981, in taxable years ending after such
date, see section 313(c) of Pub. L. 97-34, set out as a note under
section 219 of this title.
EFFECTIVE DATE OF 1980 AMENDMENT
Amendment by Pub. L. 96-222 effective, except as otherwise
provided, as if it had been included in the provision of the
Revenue Act of 1978, Pub. L. 95-600, to which such amendment
relates, see section 201 of Pub. L. 96-222, set out as a note under
section 22 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Amendment by section 156(c)(3), (5) of Pub. L. 95-600 applicable
to distributions or transfers made after Dec. 31, 1977, in taxable
years beginning after such date, see section 156(d) of Pub. L.
95-600, set out as a note under section 403 of this title.
Amendment by section 157(b)(3) of Pub. L. 95-600 applicable to
determination of deductions for taxable years beginning after Dec.
31, 1975, see section 157(b)(4)(A) of Pub. L. 95-600, set out as a
note under section 219 of this title.
Section 157(j)(2) of Pub. L. 95-600 provided that: "The amendment
made by paragraph (1) [amending this section] shall apply to
contributions made for taxable years beginning after December 31,
1977."
Section 701(aa)(2) of Pub. L. 95-600 provided that: "The
amendment made by paragraph (1) [amending this section] shall apply
as if included in section 1501 of the Tax Reform Act of 1976
[section 1501 of Pub. L. 94-455] at the time of the enactment of
such Act [Oct. 4, 1976]."
Section 703(j)(13) of Pub. L. 95-600 provided that:
"Notwithstanding section 1904(d) of the Tax Reform Act of 1976
[Pub. L. 94-455, set out as an Effective Date of 1976 Amendment
note under section 4041 of this title], the amendment made by
section 1904(a)(22)(A) of such Act [amending this section] shall
take effect on the date of the enactment of such Act [Oct. 4,
1976]."
EFFECTIVE DATE OF 1976 AMENDMENT
Amendment by section 1501(b)(8) of Pub. L. 94-455 applicable to
taxable years beginning after Dec. 31, 1976, see section 1501(d) of
Pub. L. 94-455, set out as a note under section 62 of this title.
Amendment by section 1904(a)(22) of Pub. L. 94-455 effective on
first day of first month which begins more than 90 days after Oct.
4, 1976, see section 1904(d) of Pub. L. 94-455, set out as a note
under section 4041 of this title.
EFFECTIVE DATE
Section 2002(i)(2) of Pub. L. 93-406 provided that: "The
amendments made by subsections (d) through (h) except subsection
(g)(5) and (6) [enacting this section and sections 4974 and 6693 of
this title and amending sections 37, 46, 50, 56, 72, 801, 805, 901,
3401, and 6047 of this title] shall take effect on January 1,
1975."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1994
For provisions directing that if any amendments made by subtitle
B [Secs. 521-523] of title V of Pub. L. 102-318 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1994, see section 523 of Pub. L. 102-318, set out as a note under
section 401 of this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 219, 408, 6058 of this
title.
-End-
-CITE-
26 USC Sec. 4974 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
Sec. 4974. Excise tax on certain accumulations in qualified
retirement plans
-STATUTE-
(a) General rule
If the amount distributed during the taxable year of the payee
under any qualified retirement plan or any eligible deferred
compensation plan (as defined in section 457(b)) is less than the
minimum required distribution for such taxable year, there is
hereby imposed a tax equal to 50 percent of the amount by which
such minimum required distribution exceeds the actual amount
distributed during the taxable year. The tax imposed by this
section shall be paid by the payee.
(b) Minimum required distribution
For purposes of this section, the term "minimum required
distribution" means the minimum amount required to be distributed
during a taxable year under section 401(a)(9), 403(b)(10),
408(a)(6), 408(b)(3), or 457(d)(2), as the case may be, as
determined under regulations prescribed by the Secretary.
(c) Qualified retirement plan
For purposes of this section, the term "qualified retirement
plan" means -
(1) a plan described in section 401(a) which includes a trust
exempt from tax under section 501(a),
(2) an annuity plan described in section 403(a),
(3) an annuity contract described in section 403(b),
(4) an individual retirement account described in section
408(a), or
(5) an individual retirement annuity described in section
408(b).
Such term includes any plan, contract, account, or annuity which,
at any time, has been determined by the Secretary to be such a
plan, contract, account, or annuity.
(d) Waiver of tax in certain cases
If the taxpayer establishes to the satisfaction of the Secretary
that -
(1) the shortfall described in subsection (a) in the amount
distributed during any taxable year was due to reasonable error,
and
(2) reasonable steps are being taken to remedy the shortfall,
the Secretary may waive the tax imposed by subsection (a) for the
taxable year.
-SOURCE-
(Added Pub. L. 93-406, title II, Sec. 2002(e), Sept. 2, 1974, 88
Stat. 967; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95-600, title I, Sec.
157(i)(1), Nov. 6, 1978, 92 Stat. 2808; Pub. L. 99-514, title XI,
Sec. 1121(a)(1), title XVIII, Sec. 1852(a)(7)(B), (C), Oct. 22,
1986, 100 Stat. 2464, 2866.)
-MISC1-
AMENDMENTS
1986 - Pub. L. 99-514, Sec. 1121(a)(1), amended section
generally, substituting provisions imposing an excise tax on
certain accumulations in qualified retirement plans for provisions
imposing an excise tax on certain accumulations in individual
retirement accounts and annuities.
Subsec. (a). Pub. L. 99-514, Sec. 1852(a)(7)(B), substituted
"section 408(a)(6) or 408(b)(3)" for "section 408(a)(6) or (7), or
408(b)(3) or (4)".
Subsec. (b). Pub. L. 99-514, Sec. 1852(a)(7)(C), substituted
"section 408(a)(6) or 408(b)(3)" for "section 408(a)(6) or (7) or
408(b)(3) or (4)".
1978 - Subsec. (c). Pub. L. 95-600 added subsec. (c).
1976 - Subsec. (b). Pub. L. 94-455 struck out "or his delegate"
after "Secretary".
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by section 1121(a)(1) of Pub. L. 99-514 applicable to
years beginning after Dec. 31, 1988, with special provisions for
plans maintained pursuant to collective bargaining agreements
ratified before Mar. 1, 1986, and transition rules, see section
1121(d) of Pub. L. 99-514, set out as a note under section 401 of
this title.
Amendment by section 1852(a)(7)(B), (C) of Pub. L. 99-514
effective, except as otherwise provided, as if included in the
provisions of the Tax Reform Act of 1984, Pub. L. 98-369, div. A,
to which such amendment relates, see section 1881 of Pub. L.
99-514, set out as a note under section 48 of this title.
EFFECTIVE DATE OF 1978 AMENDMENT
Section 157(i)(2) of Pub. L. 95-600 provided that: "The amendment
made by paragraph (1) [amending this section] shall apply to
taxable years beginning after December 31, 1975."
EFFECTIVE DATE
Section effective Jan. 1, 1975, see section 2002(i)(2) of Pub. L.
93-406, set out as an Effective Date note under section 4973 of
this title.
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989
For provisions directing that if any amendments made by subtitle
A or subtitle C of title XI [Secs. 1101-1147 and 1171-1177] or
title XVIII [Secs. 1800-1899A] of Pub. L. 99-514 require an
amendment to any plan, such plan amendment shall not be required to
be made before the first plan year beginning on or after Jan. 1,
1989, see section 1140 of Pub. L. 99-514, as amended, set out as a
note under section 401 of this title.
-SECREF-
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 25B, 72, 408, 457, 6058
of this title; title 23 section 181; title 49 section 41762.
-End-
-CITE-
26 USC Sec. 4975 01/19/04
-EXPCITE-
TITLE 26 - INTERNAL REVENUE CODE
Subtitle D - Miscellaneous Excise Taxes
CHAPTER 43 - QUALIFIED PENSION, ETC., PLANS
-HEAD-
Sec. 4975. Tax on prohibited transactions
-STATUTE-
(a) Initial taxes on disqualified person
There is hereby imposed a tax on each prohibited transaction. The
rate of tax shall be equal to 15 percent of the amount involved
with respect to the prohibited transaction for each year (or part
thereof) in the taxable period. The tax imposed by this subsection
shall be paid by any disqualified person who participates in the
prohibited transaction (other than a fiduciary acting only as
such).
(b) Additional taxes on disqualified person
In any case in which an initial tax is imposed by subsection (a)
on a prohibited transaction and the transaction is not corrected
within the taxable period, there is hereby imposed a tax equal to
100 percent of the amount involved. The tax imposed by this
subsection shall be paid by any disqualified person who
participated in the prohibited transaction (other than a fiduciary
acting only as such).
(c) Prohibited transaction
(1) General rule
For purposes of this section, the term "prohibited transaction"
means any direct or indirect -
(A) sale or exchange, or leasing, of any property between a
plan and a disqualified person;
(B) lending of money or other extension of credit between a
plan and a disqualified person;
(C) furnishing of goods, services, or facilities between a
plan and a disqualified person;
(D) transfer to, or use by or for the benefit of, a
disqualified person of the income or assets of a plan;
(E) act by a disqualified person who is a fiduciary whereby
he deals with the income or assets of a plan in his own
interests or for his own account; or
(F) receipt of any consideration for his own personal account
by any disqualified person who is a fiduciary from any party
dealing with the plan in connection with a transaction
involving the income or assets of the plan.
(2) Special exemption
The Secretary shall establish an exemption procedure for
purposes of this subsection. Pursuant to such procedure, he may
grant a conditional or unconditional exemption of any
disqualified person or transaction, orders of disqualified
persons or transactions, from all or part of the restrictions
imposed by paragraph (1) of this subsection. Action under this
subparagraph may be taken only after consultation and
coordination with the Secretary of Labor. The Secretary may not
grant an exemption under this paragraph unless he finds that such
exemption is -
(A) administratively feasible,
(B) in the interests of the plan and of its participants and
beneficiaries, and
(C) protective of the rights of participants and
beneficiaries of the plan.
Before granting an exemption under this paragraph, the Secretary
shall require adequate notice to be given to interested persons
and shall publish notice in the Federal Register of the pendency
of such exemption and shall afford interested persons an
opportunity to present views. No exemption may be granted under
this paragraph with respect to a transaction described in
subparagraph (E) or (F) of paragraph (1) unless the Secretary
affords an opportunity for a hearing and makes a determination on
the record with respect to the findings required under
subparagraphs (A), (B), and (C) of this paragraph, except that in
lieu of such hearing the Secretary may accept any record made by
the Secretary of Labor with respect to an application for
exemption under section 408(a) of title I of the Employee
Retirement Income Security Act of 1974.
(3) Special rule for individual retirement accounts
An individual for whose benefit an individual retirement
account is established and his beneficiaries shall be exempt from
the tax imposed by this section with respect to any transaction
concerning such account (which would otherwise be taxable under
this section) if, with respect to such transaction, the account
ceases to be an individual retirement account by reason of the
application of section 408(e)(2)(A) or if section 408(e)(4)
applies to such account.
(4) Special rule for Archer MSAs
An individual for whose benefit an Archer MSA (within the
meaning of section 220(d)) is established shall be exempt from
the tax imposed by this section with respect to any transaction
concerning such account (which would otherwise be taxable under
this section) if section 220(e)(2) applies to such transaction.
(5) Special rule for Coverdell education savings accounts
An individual for whose benefit a Coverdell education savings
account is established and any contributor to such account shall
be exempt from the tax imposed by this section with respect to
any transaction concerning such account (which would otherwise be
taxable under this section) if section 530(d) applies with
respect to such transaction.
(6) Special rule for health savings accounts
An individual for whose benefit a health savings account
(within the meaning of section 223(d)) is established shall be
exempt from the tax imposed by this section with respect to any
transaction concerning such account (which would otherwise be
taxable under this section) if, with respect to such transaction,
the account ceases to be a health savings account by reason of
the application of section 223(e)(2) to such account.
(d) Exemptions
Except as provided in subsection (f)(6), the prohibitions
provided in subsection (c) shall not apply to -
(1) any loan made by the plan to a disqualified person who is a
participant or beneficiary of the plan if such loan -
(A) is available to all such participants or beneficiaries on
a reasonably equivalent basis,
(B) is not made available to highly compensated employees
(within the meaning of section 414(q)) in an amount greater
than the amount made available to other employees,
(C) is made in accordance with specific provisions regarding
such loans set forth in the plan,
(D) bears a reasonable rate of interest, and
(E) is adequately secured;
(2) any contract, or reasonable arrangement, made with a
disqualified person for office space, or legal, accounting, or
other services necessary for the establishment or operation of
the plan, if no more than reasonable compensation is paid
therefor;
(3) any loan to an (!1) leveraged employee stock ownership plan
(as defined in subsection (e)(7)), if -
(A) such loan is primarily for the benefit of participants
and beneficiaries of the plan, and
(B) such loan is at a reasonable rate of interest, and any
collateral which is given to a disqualified person by the plan
consists only of qualifying employer securities (as defined in
subsection (e)(8));
(4) the investment of all or part of a plan's assets in
deposits which bear a reasonable interest rate in a bank or
similar financial institution supervised by the United States or
a State, if such bank or other institution is a fiduciary of such
plan and if -
(A) the plan covers only employees of such bank or other
institution and employees of affiliates of such bank or other
institution, or
(B) such investment is expressly authorized by a provision of
the plan or by a fiduciary (other than such bank or institution
or affiliates thereof) who is expressly empowered by the plan
to so instruct the trustee with respect to such investment;
(5) any contract for life insurance, health insurance, or
annuities with one or more insurers which are qualified to do
business in a State if the plan pays no more than adequate
consideration, and if each such insurer or insurers is -
(A) the employer maintaining the plan, or
(B) a disqualified person which is wholly owned (directly or
indirectly) by the employer establishing the plan, or by any
person which is a disqualified person with respect to the plan,
but only if the total premiums and annuity considerations
written by such insurers for life insurance, health insurance,
or annuities for all plans (and their employers) with respect
to which such insurers are disqualified persons (not including
premiums or annuity considerations written by the employer
maintaining the plan) do not exceed 5 percent of the total
premiums and annuity considerations written for all lines of
insurance in that year by such insurers (not including premiums
or annuity considerations written by the employer maintaining
the plan);
(6) the provision of any ancillary service by a bank or similar
financial institution supervised by the United States or a State,
if such service is provided at not more than reasonable
compensation, if such bank or other institution is a fiduciary of
such plan, and if -
(A) such bank or similar financial institution has adopted
adequate internal safeguards which assure that the provision of
such ancillary service is consistent with sound banking and
financial practice, as determined by Federal or State
supervisory authority, and
(B) the extent to which such ancillary service is provided is
subject to specific guidelines issued by such bank or similar
financial institution (as determined by the Secretary after
consultation with Federal and State supervisory authority), and
under such guidelines the bank or similar financial institution
does not provide such ancillary service -
(i) in an excessive or unreasonable manner, and
(ii) in a manner that would be inconsistent with the best
interests of participants and beneficiaries of employee
benefit plans;
(7) the exercise of a privilege to convert securities, to the
extent provided in regulations of the Secretary but only if the
plan receives no less than adequate consideration pursuant to
such conversion;
(8) any transaction between a plan and a common or collective
trust fund or pooled investment fund maintained by a disqualified
person which is a bank or trust company supervised by a State or
Federal agency or between a plan and a pooled investment fund of
an insurance company qualified to do business in a State if -
(A) the transaction is a sale or purchase of an interest in
the fund,
(B) the bank, trust company, or insurance company receives
not more than a reasonable compensation, and
(C) such transaction is expressly permitted by the instrument
under which the plan is maintained, or by a fiduciary (other
than the bank, trust company, or insurance company, or an
affiliate thereof) who has authority to manage and control the
assets of the plan;
(9) receipt by a disqualified person of any benefit to which he
may be entitled as a participant or beneficiary in the plan, so
long as the benefit is computed and paid on a basis which is
consistent with the terms of the plan as applied to all other
participants and beneficiaries;
(10) receipt by a disqualified person of any reasonable
compensation for services rendered, or for the reimbursement of
expenses properly and actually incurred, in the performance of
his duties with the plan, but no person so serving who already
receives full-time pay from an employer or an association of
employers, whose employees are participants in the plan or from
an employee organization whose members are participants in such
plan shall receive compensation from such fund, except for
reimbursement of expenses properly and actually incurred;
(11) service by a disqualified person as a fiduciary in
addition to being an officer, employee, agent, or other
representative of a disqualified person;
(12) the making by a fiduciary of a distribution of the assets
of the trust in accordance with the terms of the plan if such
assets are distributed in the same manner as provided under
section 4044 of title IV of the Employee Retirement Income
Security Act of 1974 (relating to allocation of assets);
(13) any transaction which is exempt from section 406 of such
Act by reason of section 408(e) of such Act (or which would be so
exempt if such section 406 applied to such transaction) or which
is exempt from section 406 of such Act by reason of section
408(b)(12) of such Act;
(14) any transaction required or permitted under part 1 of
subtitle E of title IV or section 4223 of the Employee Retirement
Income Security Act of 1974, but this paragraph shall not apply
with respect to the application of subsection (c)(1) (E) or (F);
or
(15) a merger of multiemployer plans, or the transfer of assets
or liabilities between multiemployer plans, determined by the
Pension Benefit Guaranty Corporation to meet the requirements of
section 4231 of such Act, but this paragraph shall not apply with
respect to the application of subsection (c)(1) (E) or (F).
(e) Definitions
(1) Plan
For purposes of this section, the term "plan" means -
(A) a trust described in section 401(a) which forms a part of
a plan, or a plan described in section 403(a), which trust or
plan is exempt from tax under section 501(a),
(B) an individual retirement account described in section
408(a),
(C) an individual retirement annuity described in section
408(b),
(D) an Archer MSA described in section 220(d),
(E) a health savings account described in section 223(d),
(F) a Coverdell education savings account described in
section 530, or
(G) a trust, plan, account, or annuity which, at any time,
has been determined by the Secretary to be described in any
preceding subparagraph of this paragraph.
(2) Disqualified person
For purposes of this section, the term "disqualified person"
means a person who is -
(A) a fiduciary;
(B) a person providing services to the plan;
(C) an employer any of whose employees are covered by the
plan;
(D) an employee organization any of whose members are covered
by the plan;
(E) an owner, direct or indirect, of 50 percent or more of -
(i) the combined voting power of all classes of stock
entitled to vote or the total value of shares of all classes
of stock of a corporation,
(ii) the capital interest or the profits interest of a
partnership, or
(iii) the beneficial interest of a trust or unincorporated
enterprise,
which is an employer or an employee organization described in
subparagraph (C) or (D);
(F) a member of the family (as defined in paragraph (6)) of
any individual described in subparagraph (A), (B), (C), or (E);
(G) a corporation, partnership, or trust or estate of which
(or in which) 50 percent or more of -
(i) the combined voting power of all classes of stock
entitled to vote or the total value of shares of all classes
of stock of such corporation,
(ii) the capital interest or profits interest of such
partnership, or
(iii) the beneficial interest of such trust or estate,
is owned directly or indirectly, or held by persons described
in subparagraph (A), (B), (C), (D), or (E);
(H) an officer, director (or an individual having powers or
responsibilities similar to those of officers or directors), a
10 percent or more shareholder, or a highly compensated
employee (earning 10 percent or more of the yearly wages of an
employer) of a person described in subparagraph (C), (D), (E),
or (G); or
(I) a 10 percent or more (in capital or profits) partner or
joint venturer of a person described in subparagraph (C), (D),
(E), or (G).
The Secretary, after consultation and coordination with the
Secretary of Labor or his delegate, may by regulation prescribe a
percentage lower than 50 percent for subparagraphs (E) and (G)
and lower than 10 percent for subparagraphs (H) and (I).
(3) Fiduciary
For purposes of this section, the term "fiduciary" means any
person who -
(A) exercises any discretionary authority or discretionary
control respecting management of such plan or exercises any
authority or control respecting management or disposition of
its assets,
(B) renders investment advice for a fee or other
compensation, direct or indirect, with respect to any moneys or
other property of such plan, or has any authority or
responsibility to do so, or
(C) has any discretionary authority or discretionary
responsibility in the administration of such plan.
Such term includes any person designated under section
405(c)(1)(B) of the Employee Retirement Income Security Act of
1974.
(4) Stockholdings
For purposes of paragraphs (2)(E)(i) and (G)(i) there shall be
taken into account indirect stockholdings which would be taken
into account under section 267(c), except that, for purposes of
this paragraph, section 267(c)(4) shall be treated as providing
that the members of the family of an individual are the members
within the meaning of paragraph (6).
(5) Partnerships; trusts
For purposes of paragraphs (2)(E)(ii) and (iii), (G)(ii) and
(iii), and (I) the ownership of profits or beneficial interests
shall be determined in accordance with the rules for constructive
ownership of stock provided in section 267(c) (other than
paragraph (3) thereof), except that section 267(c)(4) shall be
treated as providing that the members of the family of an
individual are the members within the meaning of paragraph (6).
(6) Member of family
For purposes of paragraph (2)(F), the family of any individual
shall include his spouse, ancestor, lineal descendant, and any
spouse of a lineal descendant.
(7) Employee stock ownership plan
The term "employee stock ownership plan" means a defined
contribution plan -
(A) which is a stock bonus plan which is qualified, or a
stock bonus and a money purchase plan both of which are
qualified under section 401(a), and which are designed to
invest primarily in qualifying employer securities; and
(B) which is otherwise defined in regulations prescribed by
the Secretary.
A plan shall not be treated as an employee stock ownership plan
unless it meets the requirements of section 409(h), section
409(o), and, if applicable, section 409(n), section 409(p), and
section 664(g) and, if the employer has a registration-type class
of securities (as defined in section 409(e)(4)), it meets the
requirements of section 409(e).
(8) Qualifying employer security
The term "qualifying employer security" means any employer
security within the meaning of section 409(l). If any moneys or
other property of a plan are invested in shares of an investment
company registered under the Investment Company Act of 1940, the
investment shall not cause that investment company or that
investment company's investment adviser or principal underwriter
to be treated as a fiduciary or a disqualified person for
purposes of this section, except when an investment company or
its investment adviser or principal underwriter acts in
connection with a plan covering employees of the investment
company, its investment adviser, or its principal underwriter.
(9) Section made applicable to withdrawal liability payment funds
For purposes of this section -
(A) In general
The term "plan" includes a trust described in section
501(c)(22).
(B) Disqualified person
In the case of any trust to which this section applies by
reason of subparagraph (A), the term "disqualified person"
includes any person who is a disqualified person with respect
to any plan to which such trust is permitted to make payments
under section 4223 of the Employee Retirement Income Security
Act of 1974.
(f) Other definitions and special rules
For purposes of this section -
(1) Joint and several liability
If more than one person is liable under subsection (a) or (b)
with respect to any one prohibited transaction, all such persons
shall be jointly and severally liable under such subsection with
respect to such transaction.
(2) Taxable period
The term "taxable period" means, with respect to any prohibited
transaction, the period beginning with the date on which the
prohibited transaction occurs and ending on the earliest of -
(A) the date of mailing a notice of deficiency with respect
to the tax imposed by subsection (a) under section 6212,
(B) the date on which the tax imposed by subsection (a) is
assessed, or
(C) the date on which correction of the prohibited
transaction is completed.
(3) Sale or exchange; encumbered property
A transfer or real or personal property by a disqualified
person to a plan shall be treated as a sale or exchange if the
property is subject to a mortgage or similar lien which the plan
assumes or if it is subject to a mortgage or similar lien which a
disqualified person placed on the property within the 10-year
period ending on the date of the transfer.
(4) Amount involved
The term "amount involved" means, with respect to a prohibited
transaction, the greater of the amount of money and the fair
market value of the other property given or the amount of money
and the fair market value of the other property received; except
that, in the case of services described in paragraphs (2) and
(10) of subsection (d) the amount involved shall be only the
excess compensation. For purposes of the preceding sentence, the
fair market value -
(A) in the case of the tax imposed by subsection (a), shall
be determined as of the date on which the prohibited
transaction occurs; and
(B) in the case of the tax imposed by subsection (b), shall
be the highest fair market value during the taxable period.
(5) Correction
The terms "correction" and "correct" mean, with respect to a
prohibited transaction, undoing the transaction to the extent
possible, but in any case placing the plan in a financial
position not worse than that in which it would be if the
disqualified person were acting under the highest fiduciary
standards.
(6) Exemptions not to apply to certain transactions
(A) In general
In the case of a trust described in section 401(a) which is
part of a plan providing contributions or benefits for
employees some or all of whom are owner-employees (as defined
in section 401(c)(3)), the exemptions provided by subsection
(d) (other than paragraphs (9) and (12)) shall not apply to a
transaction in which the plan directly or indirectly -
(i) lends any part of the corpus or income of the plan to,
(ii) pays any compensation for personal services rendered
to the plan to, or
(iii) acquires for the plan any property from, or sells any
property to,
any such owner-employee, a member of the family (as defined in
section 267(c)(4)) of any such owner-employee, or any
corporation in which any such owner-employee owns, directly or
indirectly, 50 percent or more of the total combined voting
power of all classes of stock entitled to vote or 50 percent or
more of the total value of shares of all classes of stock of
the corporation.
(B) Special rules for shareholder-employees, etc.
(i) In general
For purposes of subparagraph (A), the following shall be
treated as owner-employees:
(I) A shareholder-employee.
(II) A participant or beneficiary of an individual
retirement plan (as defined in section 7701(a)(37)).
(III) An employer or association of employees which
establishes such an individual retirement plan under
section 408(c).
(ii) Exception for certain transactions involving
shareholder-employees
Subparagraph (A)(iii) shall not apply to a transaction
which consists of a sale of employer securities to an
employee stock ownership plan (as defined in subsection
(e)(7)) by a shareholder-employee, a member of the family (as
defined in section 267(c)(4)) of such shareholder-employee,
or a corporation in which such a shareholder-employee owns
stock representing a 50 percent or greater interest described
in subparagraph (A).
(iii) Loan exception
For purposes of subparagraph (A)(i), the term
"owner-employee" shall only include a person described in
subclause (II) or (III) of clause (i).
(C) Shareholder-employee
For purposes of subparagraph (B), the term
"shareholder-employee" means an employee or officer of an S
corporation who owns (or is considered as owning within the
meaning of section 318(a)(1)) more than 5 percent of the
outstanding stock of the corporation on any day during the
taxable year of such corporation.
(g) Application of section
This section shall not apply -
(1) in the case of a plan to which a guaranteed benefit policy
(as defined in section 401(b)(2)(B) of the Employee Retirement
Income Security Act of 1974) is issued, to any assets of the
insurance company, insurance service, or insurance organization
merely because of its issuance of such policy;
(2) to a governmental plan (within the meaning of section
414(d)); or
(3) to a church plan (within the meaning of section 414(e))
with respect to which the election provided by section 410(d) has
not been made.
In the case of a plan which invests in any security issued by an
investment company registered under the Investment Company Act of
1940, the assets of such plan shall be deemed to include such
security but shall not, by reason of such investment, be deemed to
include any assets of such company.
(h) Notification of Secretary of Labor
Before sending a notice of deficiency with respect to the tax
imposed by subsection (a) or (b), the Secretary shall notify the
Secretary of Labor and provide him a reasonable opportunity to
obtain a correction of the prohibited transaction or to comment on
the imposition of such tax.
(i) Cross reference
For provisions concerning coordination procedures between
Secretary of Labor and Secretary of the Treasury with respect
to application of tax imposed by this section and for authority
to waive imposition of the tax imposed by subsection (b), see
section 3003 of the Employee Retirement Income Security Act of
1974.
-SOURCE-
(Added Pub. L. 93-406, title II, Sec. 2003(a), Sept. 2, 1974, 88
Stat. 971; amended Pub. L. 94-455, title XIX, Sec. 1906(b)(13)(A),
Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95-600, title I, Sec.
141(f)(5), (6), Nov. 6, 1978, 92 Stat. 2795; Pub. L. 96-222, title
I, Sec. 101(a)(7)(C), (K), (L)(iv)(III), (v)(XI), Apr. 1, 1980, 94
Stat. 198-201; Pub. L. 96-364, title II, Secs. 208(b), 209(b),
Sept. 26, 1980, 94 Stat. 1289, 1290; Pub. L. 96-596, Sec.
2(a)(1)(K),(L), (2)(I), (3)(F), Dec. 24, 1980, 94 Stat. 3469, 3471;
Pub. L. 97-448, title III, Sec. 305(d)(5), Jan. 12, 1983, 96 Stat.
2400; Pub. L. 98-369, div. A, title IV, Sec. 491(d)(45), (46),
(e)(7), (8), July 18, 1984, 98 Stat. 851-853; Pub. L. 99-514, title
XI, Sec. 1114(b)(15)(A), title XVIII, Secs. 1854(f)(3)(A),
1899A(51), Oct. 22, 1986, 100 Stat. 2452, 2882, 2961; Pub. L.
101-508, title XI, Sec. 11701(m), Nov. 5, 1990, 104 Stat. 1388-513;
Pub. L. 104-188, title I, Secs. 1453(a), 1702(g)(3), Aug. 20, 1996,
110 Stat. 1817, 1873; Pub. L. 104-191, title III, Sec. 301(f), Aug.
21, 1996, 110 Stat. 2051; Pub. L. 105-34, title II, Sec. 213(b),
title X, Sec. 1074(a), title XV, Secs. 1506(b)(1), 1530(c)(10),
title XVI, Sec. 1602(a)(5), Aug. 5, 1997, 111 Stat. 816, 949, 1065,
1079, 1094; Pub. L. 105-206, title VI, Sec. 6023(19), July 22,
1998, 112 Stat. 825; Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec.
202(a)(7), (b)(7), (10)], Dec. 21, 2000, 114 Stat. 2763, 2763A-628,
2763A-629; Pub. L. 107-16, title VI, Secs. 612(a), 656(b), June 7,
2001, 115 Stat. 100, 134; Pub. L. 107-22, Sec. 1(b)(1)(D), (3)(D),
July 26, 2001, 115 Stat. 197; Pub. L. 108-173, title XII, Sec.
1201(f), Dec. 8, 2003, 117 Stat. 2479.)
-STATAMEND-
AMENDMENT OF SECTION
For termination of amendment by section 901 of Pub. L. 107-16,
see Effective and Termination Dates of 2001 Amendment note below.
-REFTEXT-
REFERENCES IN TEXT
The Employee Retirement Income Security Act of 1974, referred to
in subsecs. (c)(2), (d)(12) to (15), (e)(3), (9)(B), (g)(1), and
(i) is Pub. L. 93-406, Sept. 2, 1974, 88 Stat. 829, as amended.
Part 1 of subtitle E of title IV of such Act is classified
generally to part 1 (29 U.S.C. 1381 et seq.) of subtitle E of
subchapter III of chapter 18 of Title 29, Labor. Sections 401, 405,
406, 408, 3003, 4044, 4223, and 4231 of such Act are classified to
sections 1101, 1105, 1106, 1108, 1203, 1344, 1403, and 1411,
respectively, of Title 29. For complete classification of this Act
to the Code, see Short Title note set out under section 1001 of
Title 29 and Tables.
The Investment Company Act of 1940, referred to in subsecs.
(e)(8) and (g), is title I of act Aug. 22, 1940, ch. 686, 54 Stat.
789, as amended, which is classified generally to subchapter I
(Sec. 80a-1 et seq.) of chapter 2D of Title 15, Commerce and Trade.
For complete classification of this Act to the Code, see section
80a-51 of Title 15 and Tables.
-MISC1-
AMENDMENTS
2003 - Subsec. (c)(6). Pub. L. 108-173, Sec. 1201(f)(1), added
par. (6).
Subsec. (e)(1)(E) to (G). Pub. L. 108-173, Sec. 1201(f)(2), added
subpar. (E) and redesignated former subpars. (E) and (F) as (F) and
(G), respectively.
2001 - Subsec. (c)(5). Pub. L. 107-22, Sec. 1(b)(1)(D), (3)(D),
in heading, substituted "Coverdell education savings" for
"education individual retirement" and in text, substituted "a
Coverdell education savings" for "an education individual
retirement".
Subsec. (e)(1)(E). Pub. L. 107-22, Sec. 1(b)(1)(D), substituted
"a Coverdell education savings" for "an education individual
retirement".
Subsec. (e)(7). Pub. L. 107-16, Secs. 656(b), 901, temporarily
inserted ", section 409(p)," after "409(n)" in concluding
provisions. See Effective and Termination Dates of 2001 Amendment
note below.
Subsec. (f)(6)(B)(iii). Pub. L. 107-16, Secs. 612(a), 901,
temporarily added cl. (iii). See Effective and Termination Dates of
2001 Amendment note below.
2000 - Subsec. (c)(4). Pub. L. 106-554, Sec. 1(a)(7) [title II,
Sec. 202(b)(10)], substituted "an Archer" for "a Archer".
Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec. 202(a)(7), (b)(7)],
substituted "Archer MSAs" for "medical savings accounts" in heading
and "Archer MSA" for "medical savings account" in text.
Subsec. (e)(1)(D). Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec.
202(b)(10)], substituted "an Archer" for "a Archer".
Pub. L. 106-554, Sec. 1(a)(7) [title II, Sec. 202(a)(7)],
substituted "Archer MSA" for "medical savings account".
1998 - Subsec. (c)(3). Pub. L. 105-206, Sec. 6023(19)(A),
substituted "exempt from the tax" for "exempt for the tax".
Subsec. (i). Pub. L. 105-206, Sec. 6023(19)(B), substituted
"Secretary of the Treasury" for "Secretary of Treasury".
1997 - Subsec. (a). Pub. L. 105-34, Sec. 1074(a), substituted "15
percent" for "10 percent".
Subsec. (c)(4). Pub. L. 105-34, Sec. 1602(a)(5), substituted "if
section 220(e)(2) applies to such transaction." for "if, with
respect to such transaction, the account ceases to be a medical
savings account by reason of the application of section 220(e)(2)
to such account."
Subsec. (c)(5). Pub. L. 105-34, Sec. 213(b)(2), added par. (5).
Subsec. (d). Pub. L. 105-34, Sec. 1506(b)(1)(B)(ii), struck out
concluding provisions which read as follows: "The exemptions
provided by this subsection (other than paragraphs (9) and (12))
shall not apply to any transaction with respect to a trust
described in section 401(a) which is part of a plan providing
contributions or benefits for employees some or all of whom are
owner-employees (as defined in section 401(c)(3)) in which a plan
directly or indirectly lends any part of the corpus or income of
the plan to, pays any compensation for personal services rendered
to the plan to, or acquires for the plan any property from or sells
any property to, any such owner-employee, a member of the family
(as defined in section 267(c)(4)) of any such owner-employee, or a
corporation controlled by any such owner-employee through the
ownership, directly or indirectly, of 50 percent or more of the
total combined voting power of all classes of stock entitled to
vote or 50 percent or more of the total value of shares of all
classes of stock of the corporation. For purposes of the preceding
sentence, a shareholder-employee (as defined in section 1379, as in
effect on the day before the date of the enactment of the
Subchapter S Revision Act of 1982), a participant or beneficiary of
an individual retirement account or an individual retirement
annuity (as defined in section 408), and an employer or association
of employees which establishes such an account or annuity under
section 408(c) shall be deemed to be an owner-employee."
Pub. L. 105-34, Sec. 1506(b)(1)(B)(i), substituted "Except as
provided in subsection (f)(6), the prohibitions" for "The
prohibitions" in introductory provisions.
Subsec. (e)(1)(D) to (F). Pub. L. 105-34, Sec. 213(b)(1), struck
out "or" at end of subpar. (D), added subpar. (E), and redesignated
former subpar. (E) as (F).
Subsec. (e)(7). Pub. L. 105-34, Sec. 1530(c)(10), inserted "and
section 664(g)" after "section 409(n)" in concluding provisions.
Subsec. (f)(6). Pub. L. 105-34, Sec. 1506(b)(1)(A), added par.
(6).
1996 - Subsec. (a). Pub. L. 104-188, Sec. 1453(a), substituted
"10 percent" for "5 percent".
Subsec. (c)(4). Pub. L. 104-191, Sec. 301(f)(1), added par. (4).
Subsec. (d)(13). Pub. L. 104-188, Sec. 1702(g)(3), substituted
"408(b)(12)" for "408(b)".
Subsec. (e)(1). Pub. L. 104-191, Sec. 301(f)(2), reenacted
heading without change and amended text generally. Prior to
amendment, text read as follows: "For purposes of this section, the
term 'plan' means a trust described in section 401(a) which forms a
part of a plan, or a plan described in section 403(a), which trust
or plan is exempt from tax under section 501(a), an individual
retirement account described in section 408(a) or an individual
retirement annuity described in section 408(b) (or a trust, plan,
account, or annuity which, at any time, has been determined by the
Secretary to be such a trust, plan, or account)."
1990 - Subsec. (d)(13). Pub. L. 101-508 inserted before semicolon
at end "or which is exempt from section 406 of such Act by reason
of section 408(b) of such Act".
1986 - Subsec. (d). Pub. L. 99-514, Sec. 1899A(51), inserted a
closing parenthesis after "and (12)" in second sentence.
Subsec. (d)(1)(B). Pub. L. 99-514, Sec. 1114(b)(15)(A),
substituted "highly compensated employees (within the meaning of
section 414(q))" for "highly compensated employees, officers, or
shareholders".
Subsec. (e)(7). Pub. L. 99-514, Sec. 1854(f)(3)(A), inserted ",
section 409(o), and, if applicable, section 409(n)" in last
sentence.
1984 - Subsec. (d). Pub. L. 98-369, Sec. 491(d)(45), substituted
in provision following par. (15) "or an individual retirement
annuity (as defined in section 408)" for ", individual retirement
annuity, or an individual retirement bond (as defined in section
408 or 409)".
Subsec. (e)(1). Pub. L. 98-369, Sec. 491(d)(46), struck out "or
405(a)" after "section 403(a)" and "or a retirement bond described
in section 409" after "section 408(b)", and substituted "or
annuity" for "annuity, or bond" and "or account" for "account, or
bond".
Subsec. (e)(7). Pub. L. 98-369, Sec. 491(e)(7), substituted
"section 409(h)" for "section 409A(h)" |
