Allan R. Powell and Joan K. Powell - Page 10

                                       - 10 -                                         
                    (i) all trusts which are part of a plan shall                     
                    be treated as a single trust, all pension                         
                    plans maintained by the employer shall be                         
                    treated as a single plan * * * .  [Emphasis                       
                    added.]                                                           
               This Court has previously held that section 402(e)(4)(C)               
          requires that we treat the Retirement System and the Pension                
          System as a single pension plan.  Dorsey v. Commissioner, T.C.              
          Memo. 1995-97; Brown v. Commissioner, T.C. Memo. 1995-93; Hoppe             
          v. Commissioner, T.C. Memo. 1994-635;  Hamilton v. Commissioner,            
          T.C. Memo. 1994-633; see Wheeler v. Commissioner, T.C. Memo.                
          1993-561; see also Sites v. United States, 75 AFTR 2d 95-2503,              
          95-1 USTC par. 50,280 (D. Md. 1995).  Thus, as a consequence of             
          aggregating the Retirement System and the Pension System, we have           
          held that a taxpayer's transfer from the Retirement System to the           
          Pension System allows the taxpayer to receive the balance to his            
          or her credit in two parts, an initial single payment (the                  
          Transfer Refund) and a reduced monthly annuity (based on all of             
          the taxpayer's years of creditable service and on the taxpayer's            
          salary during those years).  Thus, we have consistently held that           
          a Transfer Refund does not constitute a taxpayer's entire                   
          "balance to the credit" in the Retirement and Pension Systems and           
          is therefore not a lump sum distribution within the meaning of              
          section 402(e)(4)(A).                                                       
               In view of the foregoing, we hold that the Transfer Refund             
          did not constitute a lump sum distribution within the meaning of            
          section 402(e)(4)(A) because petitioner did not receive the                 




Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  Next

Last modified: May 25, 2011