§4979 — Tax on certain excess contributions

8 cases·3 followed·1 distinguished·4 cited—38% support

Statute Text — 26 U.S.C. §4979

(a)General rule

In the case of any plan, there is hereby imposed a tax for the taxable year equal to 10 percent of the sum of—

(1)

any excess contributions under such plan for the plan year ending in such taxable year, and

(2)

any excess aggregate contributions under the plan for the plan year ending in such taxable year.

(b)Liability for tax

The tax imposed by subsection (a) shall be paid by the employer.

(c)Excess contributions

For purposes of this section, the term “excess contributions” has the meaning given such term by sections 401(k)(8)(B), 408(k)(6)(C), and 501(c)(18).

(d)Excess aggregate contribution

For purposes of this section, the term “excess aggregate contribution” has the meaning given to such term by section 401(m)(6)(B). For purposes of determining excess aggregate contributions under an annuity contract described in section 403(b), such contract shall be treated as a plan described in subsection (e)(1).

(e)Plan

For purposes of this section, the term “plan” means—

(1)

a plan described in section 401(a) which includes a trust exempt from tax under section 501(a),

(2)

any annuity plan described in section 403(a),

(3)

any annuity contract described in section 403(b),

(4)

a simplified employee pension of an employer which satisfies the requirements of section 408(k), and

(5)

a plan described in section 501(c)(18).

Such term includes any plan which, at any time, has been determined by the Secretary to be such a plan.

(f)No tax where excess distributed within specified period after close of year

(1)In general

No tax shall be imposed under this section on any excess contribution or excess aggregate contribution, as the case may be, to the extent such contribution (together with any income allocable thereto through the end of the plan year for which the contribution was made) is distributed (or, if forfeitable, is forfeited) before the close of the first 2½ months (6 months in the case of an excess contribution or excess aggregate contribution to an eligible automatic contribution arrangement (as defined in section 414(w)(3))) of the following plan year.

(2)Year of inclusion

Any amount distributed as provided in paragraph (1) shall be treated as earned and received by the recipient in the recipient’s taxable year in which such distributions were made.

Treasury Regulations

Treas. Reg. §Treas. Reg. §54.4979-0 Excise tax on certain excess contributions and excess aggregate contributions; table of contents
Treas. Reg. §Treas. Reg. §54.4979-0(a) In general.
Treas. Reg. §Treas. Reg. §54.4979-0(b) Definitions.
Treas. Reg. §Treas. Reg. §54.4979-0(c) No tax when excess distributed within 2 1/2 months of close of year or additional employer contributions made.
Treas. Reg. §Treas. Reg. §54.4979-0(d) Effective date.
Treas. Reg. §Treas. Reg. §54.4979-1 Excise tax on certain excess contributions and excess aggregate contributions
Treas. Reg. §Treas. Reg. §54.4979-1(a) In general—(1) General rule.
Treas. Reg. §Treas. Reg. §54.4979-1(b) Definitions.
Treas. Reg. §Treas. Reg. §54.4979-1(c) No tax when excess distributed within 2 1/2 months of close of year or additional employer contributions made—(1) General rule.
Treas. Reg. §Treas. Reg. §54.4979-1(d) Effective date—(1) General rule.
Treas. Reg. §Treas. Reg. §54.4979-1(i) §54.4979-1(i)
Treas. Reg. §Treas. Reg. §54.4979-1(v) A plan described in section 501(c)(18).

8 Citing Cases

FOLLOWED Ries Enterprises, Inc., Petitioner · 2014

We hold that petitioner does.

FOLLOWED Law Office of John H. Eggertsen P.C., Petitioner · 2014

We hold that it does.

Michael Rosenfeld, Petitioner T.C. Memo. 2011-110 · 2011

Section 4979" Excise Tax" Respondent determined that petitioner is liable for an excise tax of $178 for excess contributions to his Schedule C SEP plan. Section 408(k) (6) (C) (i) provides that any excess contribution under an SEP plan shall abe treated as an excess contribution for purposes of section 4979. See sec. 4979(e) (4). Section 4979 imposes a 10-percent" tax on employers who make excess contributions to an-SEP plan. Petitioner asserts that even if he did make an excess contribution to

Law Office of John H. Eggertsen P.C. v. Commissioner 142 T.C. 110 · 2014

Under IRC section 4979[A](e)(2)(C), all the deemed owned shares of all the disqualified persons with respect to the Law Office of John H Eggertsen P. C. Employee Stock Ownership Plan are taken into account for determining the amount involved in the prohibited allocation. The amount of the prohibited allocation in this case is $401,500.00. Under IRC secti

Mark McKay & Christine A. Beck-McKay, Petitioners T.C. Memo. 2012-166 · 2012

e ESOP. Prohibited allocations in favor ofdisqualified persons are treated as currentlytaxable to the disqualified persons, sec. 409(p)(2)(A), and - 12 - excise taxes equal to 50% ofthe total prohibited allocations are imposed on the S corporation, sec. 4979A. Further, the ESOP will not satisfy the requirements of section 4975(e)(7) and will cease to qualify as an ESOP. The temporary regulations concerning nonqualified deferred compensation and synthetic equity had an effective date.ofJuly 21, 2

Bradley T. & Terri Jensen, Petitioner T.C. Memo. 2012-166 · 2012

Tribune Publishing Co. v. Commissioner 79 T.C. 1029 · 1982

Law Office of John H Eggertsen v. Comm'r of Internal Revenue 800 F.3d 758 · Cir.