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401(a) and terminated its qualified status so that the Retirement
System was not a qualified employer plan at the time that it
issued petitioner's Transfer Refund in 1990. Petitioners further
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 Refund.
We have previously considered and rejected petitioners'
contention in Montgomery v. Commissioner, T.C. Memo. 1996-263.
We see no need to revisit the issue. Therefore, for the reasons
stated in Montgomery v. Commissioner, supra, we hold that
petitioner received a retirement distribution under section
4980A(e)(1) in the amount of $456,611.
We now turn to petitioners' alternative argument. If the
Retirement System is a qualified employer plan, petitioners
contend the following: (1) The Transfer Refund was a lump sum
distribution, (2) petitioner elected forward averaging under
section 402(e), and (3) there was no excess distribution because
petitioners's lump sum distribution and annuity payments did not
exceed $750,000. The resolution of this issue turns on whether
the Transfer Refund constitutes a lump sum distribution within
the meaning of section 402(e)(4)(A).
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