4 participant. For this purpose and as relevant here, adjusted gross income is calculated without regard to the deduction for IRA contributions. Sec. 219(g)(3). In general, an individual is an active participant in a profit-sharing plan during a taxable year if a forfeiture is allocated to such individual's plan account as of a date in such taxable year. Sec. 1.219-2(d), Income Tax Regs; see also Barret v. Commissioner, T.C. Memo. 1980-5. An individual is not an active participant in a plan if such individual elects, pursuant to the plan, not to participate in the plan. Sec. 1.219-2(f), Income Tax Regs. Petitioners' primary argument is that an election not to contribute to the plan is tantamount to an election not to participate. However, the only evidence in the record indicates that although petitioner did not contribute to the plan, forfeitures were allocated to her account. Petitioners have failed to establish that participation in the plan was voluntary, or, in the alternative, that petitioner properly elected not to participate. Petitioners have failed to establish that petitioner was not an active participant in the plan. Petitioners also argue that respondent should be bound by prior allowance of IRA deductions for tax years 1990 and 1991 under identical circumstances. Petitioners urge us to adopt a "rule of decisions", applicable in cases that are eligible for small tax procedure, precluding the Commissioner from challengingPage: Previous 1 2 3 4 5 Next
Last modified: May 25, 2011