§505 — Additional requirements for organizations described in paragraph (9) or (17) of section 501(c)
76 cases·7 followed·6 distinguished·1 criticized·1 overruled·61 cited—9% support
Statute Text — 26 U.S.C. §505
An organization described in section 501(c)(9) which is part of a plan shall not be exempt from tax under section 501(a) unless such plan meets the requirements of subsection (b) of this section.
Paragraph (1) shall not apply to any organization which is part of a plan maintained pursuant to an agreement between employee representatives and 1 or more employers if the Secretary finds that such agreement is a collective bargaining agreement and that such plan was the subject of good faith bargaining between such employee representatives and such employer or employers.
Except as otherwise provided in this subsection, a plan meets the requirements of this subsection only if—
each class of benefits under the plan is provided under a classification of employees which is set forth in the plan and which is found by the Secretary not to be discriminatory in favor of employees who are highly compensated individuals, and
in the case of each class of benefits, such benefits do not discriminate in favor of employees who are highly compensated individuals.
A life insurance, disability, severance pay, or supplemental unemployment compensation benefit shall not be considered to fail to meet the requirements of subparagraph (B) merely because the benefits available bear a uniform relationship to the total compensation, or the basic or regular rate of compensation, of employees covered by the plan.
For purposes of paragraph (1), there may be excluded from consideration—
employees who have not completed 3 years of service,
employees who have not attained age 21,
seasonal employees or less than half-time employees,
employees not included in the plan who are included in a unit of employees covered by an agreement between employee representatives and 1 or more employers which the Secretary finds to be a collective bargaining agreement if the class of benefits involved was the subject of good faith bargaining between such employee representatives and such employer or employers, and
employees who are nonresident aliens and who receive no earned income (within the meaning of section 911(d)(2)) from the employer which constitutes income from sources within the United States (within the meaning of section 861(a)(3)).
In the case of any benefit for which a provision of this chapter other than this subsection provides nondiscrimination rules, paragraph (1) shall not apply but the requirements of this subsection shall be met only if the nondiscrimination rules so provided are satisfied with respect to such benefit.
At the election of the employer, 2 or more plans of such employer may be treated as 1 plan for purposes of this subsection.
For purposes of this subsection, the determination as to whether an individual is a highly compensated individual shall be made under rules similar to the rules for determining whether an individual is a highly compensated employee (within the meaning of section 414(q)).
For purposes of this subsection, the term “compensation” has the meaning given such term by section 414(s).
A plan shall not be treated as meeting the requirements of this subsection unless under the plan the annual compensation of each employee taken into account for any year does not exceed $200,000. The Secretary shall adjust the $200,000 amount at the same time, and by the same amount, as any adjustment under section 401(a)(17)(B). This paragraph shall not apply in determining whether the requirements of section 79(d) are met.
An organization shall not be treated as an organization described in paragraph (9) or (17) of section 501(c)—
unless it has given notice to the Secretary, in such manner as the Secretary may by regulations prescribe, that it is applying for recognition of such status, or
for any period before the giving of such notice, if such notice is given after the time prescribed by the Secretary by regulations for giving notice under this subsection.
In the case of any organization in existence on July 18, 1984, the time for giving notice under paragraph (1) shall not expire before the date 1 year after such date of the enactment.
76 Citing Cases
But unlike McQuade and Fla. Peach Corp., the bankruptcy court in this case was not acting under its authorityto determine taxes under 11 U.S.C. sec. 505(a), and there is no indication that the court was inquiring into the merits ofpetitioner's Federal tax liability for a particular year or making a determination as to total tax for that year.
505(a)(1) (2006) . If a bankruptcy court renders a final judgment as to a debtor's tax liability, res judicata .may apply to prevent the matter from being relitigated .' See Fla . Peach Corp . v . Commissioner , 90 T .C. 678, 681-684 (1988). Ifia bankruptcy court does not render a final judgment as to the tax liability, res judicata is inapplicable, the Commissioner is not precluded from determining a deficiency , '"The preclusive effect of a judgment is defined by claim preclusion and issue pre
at 1052 (1938) (codified as amended at 21 U.S.C. sec. 355 (2012)). Although the first step in requesting approval is the same for both brand name and generic 1Unless otherwise indicated, all section references are to the Internal Revenue Code (26 U.S.C.), as amended, in effect for the years at issue. Rule references are to the Ta
at 1052 (1938) (codified as amended at 21 U.S.C. sec. 355 (2012)). Although the first step in requesting approval is the same for both brand name and generic 1Unless otherwise indicated, all section references are to the Internal Revenue Code (26 U.S.C.), as amended, in effect for the years at issue. Rule references are to the Ta
at 1052 (1938) (codified as amended at 21 U.S.C. sec. 355 (2012)). Although the first step in requesting approval is the same for both brand name and generic 1Unless otherwise indicated, all section references are to the Internal Revenue Code (26 U.S.C.), as amended, in effect for the years at issue. Rule references are to the Ta
see also Uniform Trust Code sec. 505(a)(2), 7C U.L.A. 535 (2006).4 According to the Uniform Trust Code comments, "a settlor who is also a beneficiary may not use the trust as 4The District ofColumbia has, by statute, adopted the Uniform Trust Code sec. 505 in whole effective March 4, 2004. See D.C. Code sec. 19-1301 note (Lexis Nexis 2013). - 14 - a shield against the settlor's creditors." Uniform Trust Code sec. 505 cmt. (citing Restatement (Third) ofTrusts, section 58(2)). Additionally, "whet
k - 14 - section 505 for a mass determination as to whether the stock loans constituted bona fide loans or sales .
The .reopening of a bankruptcy case does not automat' cally continue or reactivate the automatic stay . Mass .IDept . of Revenue v . Crocker , 362 Bankr . 49, 56 (B .A .P . 1s Cir . 2007) ; Allison v . Commissioner, 97 T .C . 544, 546 (1991) . A bankruptcy court may reinstate a stay under its broad equi able powers under 11 U .
The court described the appellant's argument in that case as follows: Finally, * * * [appellant] argues that the district court improperly.awarded fees generated by * * * [appellees] in defending against * * * [appellant's] prior appeal of the district court's summary judgment award. Relying heavily on Circuit Rules 39-1.6 and 39-1
The court described the appellant’s argument in that case as follows: Finally, * * * [appellant] argues that the district court improperly awarded fees generated by * * * [appellees] in defending against * * * [appellant’s] prior appeal of the district court’s summary judgment award. Relying heavily on Circuit Rules 39-1.6 and 39-1
505 (2000) would permit the bankruptcy court to: determine the amount or legality of any tax, any fine or penalty relating to a tax, or any addition to tax, whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction. Because pet
505 (2000) would permit the bankruptcy court to: determine the amount or legality of any tax, any fine or penalty relating to a tax, or any addition to tax, whether or not previously assessed, whether or not paid, and whether or not contested before and adjudicated by a judicial or administrative tribunal of competent jurisdiction. Because pet
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
section 505 on May 17, 1993. On December 16, 1993, respondent timely mailed to petitioners a notice of deficiency for the 1984 and 1986 taxable years. The deficiencies were determined on the basis of a - 5 - prospective settlement of the partnership proceedings, pursuant to which the business energy investment credit would be disallowed for 1985,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
§ 505 (b) for a prompt audit of the partnerships’ tax returns. Ultimately, the trustee entered into the agreement with the investors, and the agreement was approved by the Bankruptcy Court. The record does not disclose what action, if any, was taken to seek a ruling from the Internal Revenue Service as contemplated in the passages of the agreement,
section 505 on May 17, 1993. On December 16, 1993, respondent timely mailed to petitioners a notice of deficiency for the 1984 and 1986 taxable years. The deficiencies were determined on the basis of a prospective settlement of the partnership proceedings, pursuant to which the business energy investment credit would be disallowed for 1985, while a