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for excise tax under section 4971(a) and imposed a failure to
file penalty under section 6651(a)(1).
Discussion
A. Excise Tax Under Section 4971(a)
Section 412 was designed to ensure that qualified plans
would accumulate sufficient assets to meet those plans’
obligations to their beneficiaries. See H. Rept. 93-779, at 73
(1974), 1974-3 C.B. 244, 316. Section 412(a), in part, provides:
A plan to which this section applies shall have satisfied
the minimum funding standard for such plan for a plan year
if as of the end of such plan year, the plan does not have
an accumulated funding deficiency. For purposes of this
section and section 4971, the term “accumulated funding
deficiency” means for any plan the excess of the total
charges to the funding standard account for all plan years
(beginning with the first plan year to which this section
applies) over the total credits to such account for such
years or, if less, the excess of the total charges to the
alternative minimum funding standard account for such plan
years over the total credits to such account for such years.
* * *
To ensure that a qualified plan maintains minimum funding,
section 412(b)(1) requires employers to maintain a “funding
standard account” for each plan. Charges to the account consist
of the normal cost of the plan for the plan year and the
amortization of certain costs and liabilities. See sec.
412(b)(2). Credits to the account consist, generally, of
employer contributions for the plan year and the amortization of
certain adjustments. See sec. 412(b)(3).
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Last modified: May 25, 2011