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26 USC 4977 - Tax on certain fringe benefits provided by an employer

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Sec. 4977. Tax on certain fringe benefits provided by an employer

(a)
Imposition of tax
In the case of an employer to whom an election under this section applies for any calendar year, there is hereby imposed a tax for such calendar year equal to 30 percent of the excess fringe benefits.
(b)
Excess fringe benefits
For purposes of subsection (a), the term "excess fringe benefits" means, with respect to any calendar year—
(1) the aggregate value of the fringe benefits provided by the employer during the calendar year which were not includible in gross income under paragraphs (1) and (2) of section 132 (a), over
(2) 1 percent of the aggregate amount of compensation—
(A) which was paid by the employer during such calendar year to employees, and
(B) was includible in gross income for purposes of chapter 1.
(c)
Effect of election on section
132
(a)
If—
(1) an election under this section is in effect with respect to an employer for any calendar year, and
(2) at all times on or after January 1, 1984, and before the close of the calendar year involved, substantially all of the employees of the employer were entitled to employee discounts on goods or services provided by the employer in 1 line of business,
for purposes of paragraphs (1) and (2) of section 132 (a) (but not for purposes of section 132 (h)), all employees of any line of business of the employer which was in existence on January 1, 1984, shall be treated as employees of the line of business referred to in paragraph (2).
(d)
Period of election
An election under this section shall apply to the calendar year for which made and all subsequent calendar years unless revoked by the employer.
(e)
Treatment of controlled groups
All employees treated as employed by a single employer under subsection (b), (c), or (m) of section 414 shall be treated as employed by a single employer for purposes of this section.
(f)
Section to apply only to employment within the United States
Except as otherwise provided in regulations, this section shall apply only with respect to employment within the United States.

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Last modified: July 21, 2011