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plan as "a plan which provides for an individual account for each
participant and for benefits based solely on the amount
contributed to the participant's account, and any income,
expenses, gains, and losses, and any forfeitures of accounts of
other participants which may be allocated to such participant's
account." Although petitioners acknowledge that a defined
contribution plan must provide for an individual account for each
participant, and the benefits therefrom must be based on the
amounts contributed, they contend that gains and losses are not
required to be allocated to a participant's account and that
maintaining individual records of the participant's contributions
is sufficient. Petitioners focus on the inclusion of the terms
"any" and "may" in section 414(i) in defining a defined
contribution plan.
In support of their contention, petitioners rely upon the
decision in Guilzon v. Commissioner, 985 F.2d 819 (5th Cir.
1993), affg. on other grounds 97 T.C. 237 (1991), in which the
Court of Appeals for the Fifth Circuit rejected the Government's
assertion that earnings and losses must be allocated to the
participant's account. The Court of Appeals focused on the
language of section 414(i) and concluded that an account can
qualify as a separate account without having gains and losses
being credited to the participant's account. Id. at 822. While
ultimately concluding that the taxpayer's lump-sum credit was
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