8 Petitioner finally contends that because he was an involuntary member of PERS, was only employed for 9 weeks during 1990, only contributed $133.88 in that time, and forfeited all rights under PERS when he resigned effective February 1, 1991, it is inequitable to disallow his IRA deduction. Under section 1.219-2(e) of the Income Tax Regulations, "If an employee makes a voluntary or mandatory contribution to a [defined benefit] plan * * * such employee is an active participant". The fact that contributions made by petitioner to PERS were mandatory under State law is irrelevant. Moreover, a person can be an active participant even though he had only forfeitable rights to plan benefits and those rights were, in fact, forfeited prior to becoming vested. Eanes v. Commissioner, 85 T.C. 168, 170 (1985) (citing Hildebrand v. Commissioner, 683 F.2d 57, 58 (3d Cir. 1982), affg. T.C. Memo. 1980-532)); Wartes v. Commissioner, T.C. Memo. 1993-84.5 Eanes involved a taxpayer who forfeited all rights under an employer's retirement plan when he left after only 3 months. Despite the short time the taxpayer worked, we held that he was an active participant in his employer's plan and was not entitled to a 5 In Eanes v. Commissioner, 85 T.C. 168 (1985), we rejected any distinction based upon the absence of potential for double tax benefits, the crux of the reversal of our decision by the Seventh Circuit Court of Appeals in Foulkes v. Commissioner, 638 F.2d 1105 (7th Cir. 1981)(construing a prior version of sec. 219), revg. T.C. Memo. 1978-498. Eanes v. Commissioner, supra at 171; see also Johnson v. Commissioner, 661 F.2d 53 (5th Cir. 1981), affg. 74 T.C. 1057, 1060 (1980).Page: Previous 1 2 3 4 5 6 7 8 9 Next
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