Ezel / IRS Rulings / 200935033

CCA 200935033: Accrued-benefit waiver cannot correct a funding deficiency

Number
200935033
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Taxes on Failure to Meet Minimum Funding Standards; Accrued Benefit Waiver; Exclusive Benefit of Employees or Their Beneficiaries
Topics
Excise taxes Retirement plans, IRAs, and annuities
Code sections
§ 4971, § 412, § 401, § 6110
Ruling dated
July 8, 2009
Publicly released
August 28, 2009
Source
View Official PDF

Apply this to your situation

This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2009, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2009
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

This Chief Counsel Advice considers whether waiving the present value of a taxpayer's accrued benefit can correct a pension-plan funding deficiency under IRC §§ 412 and 4971. The Advice concludes that it cannot. It points to TAM 9146005 and Alfred E. Gallade v. Commissioner for discussion of the issue. For the procedure to request a waiver of the IRC § 4971(b) tax, it refers to Rev. Proc. 2000-17.

Ruling snapshot

  • Question: Can a waiver of the present value of an accrued benefit correct a funding deficiency under IRC §§ 412 and 4971?
  • Outcome: Advice given, no
  • Key authorities: IRC §§ 412 and 4971; Alfred E. Gallade v. Commissioner, 106 T.C. 355 (1996); Rev. Proc. 2000-17, 2000-11 I.R.B. 766.

Full text (IRS public release)

ID: CCA_2009070816002350 Number: 200935033
Release Date: 8/28/2009
Office: -------------------------
UILC: 4971.00-00, 412.07-00, 401.01-01

From: --------------------
Sent: Wednesday, July 08, 2009 4:00:27 PM
To: ------------------
Cc: --------------------
Subject: Waiver of accrued benefits

--------

The question you asked whether the funding deficiency under sections 412 and 4971 of the Code can be corrected by the waiver of the present value of the taxpayer's accrued benefit? I discussed this with ---- and the answer was no. See the attached TAM 9146005 and Alfred E. Gallade v.
Commissioner, 106 T.C. 355 (1996) that discuss the issue. Concerning the procedure for waiving the
4971(b) tax see the attached Rev. Proc. 2000-17, 2000-11 I.R.B. 766.

If there is anything else you can call me at ----------------------or e-mail me.

What does the Code say today, for your facts?

This advice was written for IRS staff and cannot be cited. Ezel checks the current Internal Revenue Code and IRS guidance against your situation, with citations.

Opens in Ezel Pro.

  • Checks the law as it stands today, not only this page
  • Cites every source it relies on, so you can verify it
  • Chat, drafting and research in one workspace