26 U.S.C. § 7476 — Declaratory judgments relating to qualification of certain retirement plans
submitted 52 years ago by Pub. L. 93-406 to r/title-26-INTERNAL-REVENUE-CODE · 654 words · no verdicts yet
The Tax Court can issue a declaration about whether a retirement plan qualifies for tax benefits, or resolve IRS delays in deciding this. Only certain people, like the employer or plan administrator, can start this kind of case. The person must first use up all IRS appeal options before going to court.
(a) Creation of remedy: If there is a real dispute over (1) whether the IRS made a correct decision on whether a retirement plan initially or continues to qualify under subchapter D of chapter 1, or (2) the IRS's failure to decide (A) initial qualification or (B) continuing qualification when the dispute comes from a plan amendment or termination - then, once the right paperwork is filed, the Tax Court* can declare whether the plan qualifies. This declaration works like, and can be reviewed like, a regular Tax Court decision. A "continuing qualification" determination includes any revocation or other change to a plan's qualified status.
(b) Limitations:
(1) Petitioner: only the employer, the plan administrator, a qualifying "interested" employee* (as defined by IRS regulations), or the Pension Benefit Guaranty Corporation* can start this kind of case.
(2) Notice: the Tax Court can treat a filing as premature unless the petitioner proves they gave proper notice to other interested parties about their request for an IRS determination.
(3) Exhaustion of administrative remedies: the Tax Court cannot issue a declaratory judgment unless the petitioner has used up all available IRS appeal options first. A petitioner is not considered to have exhausted those options for an IRS failure to decide until at least 270 days after they asked for the determination.
(4) Plan put into effect: the case cannot proceed unless the retirement plan (and, if the dispute is about an amendment, the amendment itself) was already in effect before the case was filed. A plan does not stop counting as "in effect" just because contributed funds could be refunded if the plan turns out not to qualify.
(5) Time for bringing action: if the IRS mails its qualification decision by certified or registered mail to the people listed in (1) - or to an employee's designated representative - no case can be filed more than 90 days after that mailing.
(c) Retirement plan: for this section, "retirement plan" means (1) a pension, profit-sharing, or stock* bonus plan under section 401(a), or a trust that is part of one, or (2) an annuity plan under section 403(a).
(d) Cross reference: for rules about the Pension Benefit Guaranty Corporation and the Secretary* of Labor stepping into these cases, and the Corporation's right to bring its own case, see section 3001(c) of the Employee Retirement Income Security Act of 1974.
In a case of actual controversy involving—
a determination by the Secretary* with respect to the initial qualification or continuing qualification of a retirement plan under subchapter D of chapter 1, or
a failure by the Secretary to make a determination with respect to—
such initial qualification, or
such continuing qualification if the controversy arises from a plan amendment or plan termination,
upon the filing of an appropriate pleading, the Tax Court* may make a declaration with respect to such initial qualification or continuing qualification. Any such declaration shall have the force and effect of a decision of the Tax Court and shall be reviewable as such. For purposes of this section, a determination with respect to a continuing qualification includes any revocation of or other change in a qualification.
A pleading may be filed under this section only by a petitioner who is the employer, the plan administrator, an employee* who has qualified under regulations prescribed by the Secretary as an interested party for purposes of pursuing administrative remedies within the Internal Revenue Service, or the Pension Benefit Guaranty Corporation*.
For purposes of this section, the filing of a pleading by any petitioner may be held by the Tax Court to be premature, unless the petitioner establishes to the satisfaction of the court that he has complied with the requirements prescribed by regulations of the Secretary with respect to notice to other interested parties of the filing of the request for a determination referred to in subsection (a).
The Tax Court shall not issue a declaratory judgment or decree under this section in any proceeding unless it determines that the petitioner has exhausted administrative remedies available to him within the Internal Revenue Service. A petitioner shall not be deemed to have exhausted his administrative remedies with respect to a failure by the Secretary to make a determination with respect to initial qualification or continuing qualification of a retirement plan before the expiration of 270 days after the request for such determination was made.
No proceeding may be maintained under this section unless the plan (and, in the case of a controversy involving the continuing qualification of the plan because of an amendment to the plan, the amendment) with respect to which a decision of the Tax Court is sought has been put into effect before the filing of the pleading. A plan or amendment shall not be treated as not being in effect merely because under the plan the funds contributed to the plan may be refunded if the plan (or the plan as so amended) is found to be not qualified.
If the Secretary sends by certified or registered mail notice of his determination with respect to the qualification of the plan to the persons referred to in paragraph (1) (or, in the case of employees referred to in paragraph (1), to any individual designated under regulations prescribed by the Secretary as a representative of such employee), no proceeding may be initiated under this section by any person unless the pleading is filed before the ninety-first day after the day after such notice is mailed to such person (or to his designated representative, in the case of an employee).
For purposes of this section, the term “retirement plan” means—
a pension, profit-sharing, or stock* bonus plan described in section 401(a) or a trust which is part of such a plan, or
an annuity plan described in section 403(a).
For provisions concerning intervention by Pension Benefit Guaranty Corporation and Secretary of Labor in actions brought under this section and right of Pension Benefit Guaranty Corporation to bring action, see section 3001(c) of subtitle A of title III of the Employee Retirement Income Security Act of 1974.
Source credit: (Added Pub. L. 93–406, title II, § 1041(a), Sept. 2, 1974, 88 Stat. 949; amended Pub. L. 94–455, title X, § 1042(d)(2)(C), title XIII, § 1306(b)(3), title XIX, §§ 1906(a)(48), (b)(13)(A), Oct. 4, 1976, 90 Stat. 1639, 1719, 1831, 1834; Pub. L. 95–600, title III, § 336(b)(2)(A), title VII, § 701(dd)(1), Nov. 6, 1978, 92 Stat. 2842, 2924; Pub. L. 98–369, div. A, title IV, § 491(d)(52), July 18, 1984, 98 Stat. 852; Pub. L. 99–514, title XVIII, § 1899A(59), Oct. 22, 1986, 100 Stat. 2962.)
- 1974Enacted · Pub. L. 93-406 · 88 Stat. 949
- 1976Amended · Pub. L. 94-455 · 90 Stat. 1639, 1719, 1831, 1834
- 1978Amended · Pub. L. 95-600 · 92 Stat. 2842, 2924
- 1984Amended · Pub. L. 98-369 · 98 Stat. 852
- 1986Amended · Pub. L. 99-514 · 100 Stat. 2962
A history note hasn’t been published yet. The record shows enactment by Pub. L. 93-406 on 1974-09-02.
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