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The determination of whether an individual is an active
participant shall be made without regard to whether or not
such individual’s rights under a plan, trust, or contract
are nonforfeitable.
Petitioners logically contend that because Mrs. Colombell
never actually participated in the pension, nor did her employer
ever participate on her behalf, Mrs. Colombell was not an active
participant in the plan. Petitioners invoke the commonly
accepted meanings of the terms “active” and “participant”. Thus,
the dictionary defines “active” as, inter alia:
1: characterized by action rather than by
contemplation or speculation 2: * * * involving
action * * * 8: * * * b: engaged in an action or
activity
Merriam-Webster’s Collegiate Dictionary (10th ed. 1996).
Similarly, a “participant” is defined as “one that participates”.
Id.
The regulations, however, provide that an individual is an
active participant in a defined benefit plan simply by not being
excluded from the plan. See sec. 1.219-2(h), Example (1), Income
Tax Regs. No actual behavior on anyone’s part is required. In
fact, actual knowledge of the plan’s existence is not even
required.5 See, e.g., Baumann v. Commissioner, T.C. Memo. 1995-
313. Because Inova’s plan was mandatory for all employees, Mrs.
5 Mrs. Colombell may or may not have known that she was
eligible to participate in Inova’s 401(k) plan. While this does
not change the result we reach, the Court notes that
participation in Inova’s 401(k) plan would have led to a pretax
savings for retirement, achieving the end tax result desired by
petitioners.
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