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At the end of each plan year, if the charges to the account
(defined by section 412(b)(2)) exceed the credits (defined by
section 412(b)(3)), the excess is referred to as an “accumulated
funding deficiency”. Sec. 412(a). If there is an accumulated
funding deficiency for a plan year, the plan is underfunded, and
the employer is subject to excise tax under section 4971(a). See
secs. 412(a), 4971(a). Section 4971(a) imposes a 10 percent tax
upon the amount of the accumulated funding deficiency. Section
4971(e) provides that the tax shall be paid by the employer
responsible for contributing to the plan.
Under section 412(b)(3)(A) the funding standard account
shall be credited with “the amount considered contributed by the
employer to or under the plan for the plan year”. This amount
includes contributions made during the plan year and certain
contributions made after the close of the plan year. Section
412(c)(10)(B) provides that
any contributions for a plan year made by an employer after
the last day of such plan year, but not later than two and
one-half months after such day, shall be deemed to have been
made on such last day. For purposes of this subparagraph,
such two and one-half month period may be extended for not
more than six months under regulations prescribed by the
Secretary.
Section 11.412(c)-12(b)(1), Temporary Income Tax Regs., 41 Fed.
Reg. 46597 (Oct. 22, 1976), provides:
(b) Six month extension of two and one-half month
period. (1) For purposes of section 412 a contribution for
a plan year to which section 412 applies that is made not
more than eight and one half months after the end of such
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Last modified: May 25, 2011