Richard J. Montgomery and Adele S. Montgomery - Page 8

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          does not offer an exclusive definition of qualified employer                
          plans, rather, it illustrates one example of when a plan will be            
          treated as a qualified employer plan.  Under the plain language             
          of section 4980A(e)(2), a qualified employer plan includes a plan           
          which, at any time, has been determined by the Commissioner to be           
          a qualified plan; i.e., by means of a determination letter, as in           
          the present case.  Thus, the fact the Retirement System is a                
          governmental plan does not preclude it from satisfying the                  
          definition of a qualified employer plan.                                    
               Petitioners also contend that the amendments made to the               
          Retirement System in 1984 violate various provisions of section             
          401(a) and terminated its qualified status so that the Retirement           
          System was not a qualified employer plan at the time it issued              
          petitioner's Transfer Refund in 1990.  Petitioners argue that the           
          excise tax under section 4980A should not apply to petitioner's             
          Transfer Refund unless the Retirement System was a qualified                
          employer plan at the time that it distributed the Transfer                  
               Respondent contends that, for purposes of section 4980A(a),            
          the qualified status of the Retirement System at the time of                
          petitioner's distribution is irrelevant.  Specifically,                     
          respondent contends that, under the plain language of section               
          4980A(e)(2), once the Commissioner determines that a plan is a              
          qualified employer plan, the plan's status for purposes of                  
          section 4980A is not changed by subsequent events that might                

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