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).
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