William Edward and Patricia Marie Colombell - Page 8

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          Colombell was not excluded.  Even if she never met the                      
          dictionary’s definition of what it would mean to be an “active              
          participant”, the regulations make it clear that she was an                 
          active participant in Inova’s retirement plan for the year in               
          issue.6                                                                     
               There are cases that have held that even de minimis                    
          participation is sufficient to render a taxpayer an active                  
          participant.  See, e.g., Wade v. Commissioner, T.C. Memo. 2001-             
          114 (holding that a mandatory contribution amounting to $84.89              
          was sufficient to constitute active participation even though the           
          taxpayer was unlikely ever to receive benefits under the plan).             
          Others have held that forfeiting rights to a balance in a                   
          qualified plan does not mean that the taxpayer was not an active            
          participant for the year in question.  See, e.g., Eanes v.                  
          Commissioner, 85 T.C. 168 (1985) (stating that a taxpayer who               
          forfeited all rights under his employer’s retirement plan when he           
          left after only 3 months was still an active participant in the             
          plan and was not entitled to a deduction).7  Here we have a                 


               6  Had Inova’s plan had an earnings threshold rather than an           
          hours-worked threshold, Mrs. Colombell might not have been an               
          active participant.  See sec. 1.219-2(b)(1), Income Tax Regs.,              
          explaining that an individual is not an active participant if his           
          or her compensation is “less than the minimum amount of                     
          compensation needed under the plan to accrue a benefit.”                    
               7  Sec. 219, as applicable to 1981, the taxable year in                
          issue in Eanes v. Commissioner, 85 T.C. 168 (1985), did not                 
          include a definition of “active participant”.  The flush language           
          currently contained in sec. 219(g)(5), referring to whether the             
                                                             (continued...)           




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