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Section 4980 was introduced into the Code by section 1132(a)
of the Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2085,
2478. The excise tax there enacted was at the rate of 10
percent, which has since been increased to 15 percent5 and then
finally to 20 percent.6 The reason for imposing that excise tax
has been explained as follows:
To the extent that amounts in such plans are not used
for retirement purposes and revert to an employer,
Congress believed that the tax treatment of reversions
should recognize that the tax on earnings on pension
funds is deferred and, thus, the benefits of this tax
treatment should be recaptured. Although Congress
believed that it might be possible to determine the
particular year or years in which contributions
resulting in a reversion arose and to recoup the
resulting tax benefit attributable to a reversion on
that basis, Congress was concerned that such a
computation would involve undue complexity. Under the
circumstances, therefore, Congress determined that a
nondeductible excise tax should be imposed on
reversions at a uniform rate. [Staff of Joint Comm. on
Taxation, General Explanation of the Tax Reform Act of
1986 at 751 (J. Comm. Print 1987)]
The record in this case does not disclose whether any such
excise was proposed or assessed against petitioner corporation
here. And it has been indicated that the imposition of the
excise tax on the employer reversion does not preclude the
inclusion of the employer reversion in the employer's gross
5 The amendment was adopted in 1988. See Technical and
Miscellaneous Revenue Act of 1988, Pub. L. 100-647, 102 Stat.
3704.
6 Sec. 4980 was amended in 1990 to 20 percent. See Omnibus
Budget Reconciliation Act of 1990, Pub. L. 101-508, sec. 12001,
104 Stat. 1388-562.
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