26 U.S.C. § 4976 — Taxes with respect to funded welfare benefit plans
submitted 42 years ago by Pub. L. 98-369 to r/title-26-INTERNAL-REVENUE-CODE · 353 words · no verdicts yet
This section imposes a 100% tax on an employer when its welfare benefit fund provides a disqualified benefit. It defines that benefit and states exceptions.
(a) If an employer maintains a welfare benefit fund* and it provides a disqualified benefit during a taxable year*, the employer owes 100% of the benefit. (b)(1) A disqualified benefit is the listed improperly funded key-employee* benefit, discriminatory benefit unless section 505(b) is met, or fund amount reverting to the employer. (b)(2) The discrimination rule does not apply to a qualifying collectively bargained plan. (b)(3) The reversion rule does not apply to nondeductible section 419 contributions. (b)(4) The first two rules do not apply to benefits charged against an existing reserve or its income. (c) Terms have the meanings in the specified Code subpart.
If—
an employer maintains a welfare benefit fund*, and
there is a disqualified benefit provided during any taxable year*,
there is hereby imposed on such employer a tax equal to 100 percent of such disqualified benefit.
For purposes of subsection (a)—
The term “disqualified benefit” means—
any post-retirement medical benefit or life insurance benefit provided with respect to a key employee* if a separate account is required to be established for such employee under section 419A(d) and such payment is not from such account,
any post-retirement medical benefit or life insurance benefit provided with respect to an individual in whose favor discrimination is prohibited unless the plan meets the requirements of section 505(b) with respect to such benefit (whether or not such requirements apply to such plan), and
any portion of a welfare benefit fund reverting to the benefit of the employer.
Paragraph (1)(B) shall not apply to any plan maintained pursuant to an agreement between employee representatives and 1 or more employers if the Secretary* finds that such agreement is a collective bargaining agreement and that the benefits referred to in paragraph (1)(B) were the subject of good faith bargaining between such employee representatives and such employer or employers.
Paragraph (1)(C) shall not apply to any amount attributable to a contribution to the fund which is not allowable as a deduction under section 419 for the taxable year or any prior taxable year (and such contribution shall not be included in any carryover under section 419(d)).
Subparagraphs (A) and (B) of paragraph (1) shall not apply to post-retirement benefits charged against an existing reserve for post-retirement medical or life insurance benefits (as defined in section 512(a)(3)(E)) or charged against the income on such reserve.
For purposes of this section, the terms used in this section shall have the same respective meanings as when used in subpart D of part I of subchapter D of chapter 1.
Source credit: (Added Pub. L. 98–369, div. A, title V, § 511(c)(1), July 18, 1984, 98 Stat. 861; amended Pub. L. 99–514, title XVIII, § 1851(a)(11), Oct. 22, 1986, 100 Stat. 2861; Pub. L. 100–647, title I, § 1011B(a)(27)(A), (B), title III, § 3021(a)(1)(C), Nov. 10, 1988, 102 Stat. 3487, 3626; Pub. L. 101–140, title II, § 203(a)(2), Nov. 8, 1989, 103 Stat. 830.)
- 1984Enacted · Pub. L. 98-369 · 98 Stat. 861
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2861
- 1988Amended · Pub. L. 100-647 · 102 Stat. 3487, 3626
- 1989Amended · Pub. L. 101-140 · 103 Stat. 830
A history note hasn’t been published yet. The record shows enactment by Pub. L. 98-369 on 1984-07-18.
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