Howard E. Clendenen - Page 9

                                        - 9 -                                         

               contributions.  Thus, for example, elective                            
               contributions are treated as employer contributions for                
               purposes of sections 401(a) and 401(k), 402, 404, 409,                 
               411, 412, 415, 416, and 417.                                           
               The issue in respect of elective deferrals has been before             
          this Court under substantially identical circumstances.  See                
          Steel Balls, Inc. v. Commissioner, T.C. Memo. 1995-266, affd.               
          without published opinion 89 F.3d 841 (8th Cir. 1996).6  We                 
          rejected the same argument presented herein and concluded that              
          respondent's position was clearly supported by the statute and              
          regulations.  We reach the same conclusion herein and hold that             
          the elective deferrals are employer contributions and not                   
          included in "participant's compensation".  Consequently, the                
          amounts of the elective deferrals are included in annual                    
          additions.7  Sec. 415(c)(2).                                                
               Petitioner also seeks to include in "participant's                     
          compensation" the amounts of the commissions or bonuses that                

               6  The Small Business Job Protection Act of 1996, Pub. L.              
          104-188, sec. 1434(a), 110 Stat. 1807, added sec. 415(c)(3)(D)              
          which includes certain deferrals in participant's compensation,             
          effective for years beginning after Dec. 31, 1997.  This                    
          amendment does not apply to the instant case.  We note, however,            
          that the legislative history makes clear that Congress considered           
          the provisions of the then-existing law as requiring the result             
          reached herein and specifically intended to change the law for              
          future years.  H. Rept. 104-586 at 112 (1996), 1996-3 C.B. 331,             
          450; S. Rept. 104-281 at 80 (1996); H. Conf. Rept. 104-737 at               
          245-246 (1996), 1996-3 C.B. 741, 985-986.                                   
               7  Since the years involving the elective deferrals are                
          fiscal years ending June 30, 1986, and June 30, 1987, only a                
          portion of the employee contributions would have been included.             
          Sec. 415(c)(2)(B); see supra note 4.                                        

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

Last modified: May 25, 2011