- 18 -
arguments are variations of the same theme, that "the fundamental
condition of income deferral in qualified plans [is] that such
deferral is accorded only to employee participants. Sections
401(a), 401(b), 402."
The section 83(e)(2) exception only requires that there be
"a transfer to or from a trust described in section 401(a)".
Respondent concedes that the pension plan and profit sharing fund
were qualified under section 401(a) and the respective trusts
were exempt under section 501(a) for all the years in issue. We
have held, supra, that the contributions in issue were
transferred to the respective trusts in connection with the
performance of services by petitioner. Consequently, the
requirements of section 83(e)(2) have been met; petitioner is
exempt from section 83(a). Respondent cannot simultaneously
argue that the trusts were in violation of section 401(a)(2)
while conceding that the pension plan and profit sharing fund
were qualified plans under section 401(a). The positions are
mutually exclusive; respondent is bound by his concession.
Respondent, in his reply brief, argues that the
economic-benefit doctrine9 provides a legal basis for taxing
petitioner. In Berkery v. Commissioner, 91 T.C. 179 (1988),
affd. without published opinion 872 F.2d 411 (3d Cir. 1989) we
stated:
9 This is sometimes known as the "economic-benefit theory".
Page: Previous 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 NextLast modified: May 25, 2011