DocketNumber: No. 5580-99
Citation Numbers: 2000 T.C. Memo. 156, 79 T.C.M. 1995, 2000 Tax Ct. Memo LEXIS 185
Judges: \"Armen, Robert N.\"
Filed Date: 5/12/2000
Status: Non-Precedential
Modified Date: 11/21/2020
*185 Decision will be entered for respondent.
MEMORANDUM OPINION
ARMEN, SPECIAL TRIAL JUDGE: Respondent determined a deficiency in petitioner's Federal excise tax under
*186 BACKGROUND
This case was submitted fully stipulated under Rule 122, and the facts stipulated are so found. Petitioner resided in San Francisco, California, at the time that his petition was filed with the Court.
Petitioner is a certified public accountant who operates a sole proprietorship. Petitioner adopted the Phillip M. Wenger self- employed retirement money purchase plan (the Wenger plan) in 1984. Thereafter, in August 1990, petitioner adopted an updated version of the Wenger plan using a prototype money purchase plan offered by Charles Schwab and Co., Inc. (Charles Schwab). In June 1990, the Internal Revenue Service issued a favorable determination letter to Charles Schwab for the prototype standardized money purchase pension plan adopted by petitioner. In December 1994, petitioner adopted a further updated version of the Wenger plan, again using a prototype money purchase plan offered by Charles Schwab.
The Wenger plan was in effect for petitioner's 1994 tax year. Petitioner is the employer who sponsors the Wenger plan and is responsible for funding it. The Wenger plan is a qualified plan subject to the minimum funding standards of
The Wenger plan has a plan*187 year ending December 31, and the plan reports on a calendar year basis. On July 6, 1995, petitioner filed a Form 5558, Application for Extension of Time to File Certain Employee Plan Returns, requesting a 2-
On Form 5500-C/R, petitioner reported that, pursuant to
Petitioner reported income and expense in respect of his sole proprietorship on a Schedule C, Profit or Loss From Business, to his Form 1040 on a calendar year basis. He applied for both an automatic 4-month extension and an additional extension of time to file his Federal income tax return for 1994. The extensions were granted, and petitioner's 1994 Federal income tax return was therefore due on Monday, October 16, 1995. On his 1994 Federal income tax return, petitioner deducted the entire $ 18,275 as a contribution to the Wenger plan.
Petitioner did not file a Form 5330, Return of Initial Excise Taxes Related to Pension and Profit-Sharing Plans, for 1994.
In the notice of deficiency, *188 respondent determined that for the year in issue, an accumulated funding deficiency of $ 18,275 existed for the Wenger plan. Respondent further determined that as the plan's sponsor and person responsible for making the contributions, petitioner was liable for an excise tax equal to 10 percent of the funding deficiency pursuant to
DISCUSSION
The parties agree that for the Wenger plan year ending December 31, 1994, petitioner was required to make contributions in the amount of $ 18,275 and that petitioner's failure to make a timely contribution would result in an accumulated funding deficiency in such amount. The only issue is whether petitioner made a timely contribution for the year.
*190 any contributions for a plan year made by an employer after the
last day of such plan year, but not later than two and one-half
months after such day, shall be deemed to have been made on such
last day. For purposes of this subparagraph, such two and one-
half month period may be extended for not more than six months
under regulations prescribed by the Secretary.
Petitioner contends that no accumulated funding deficiency existed for the Wenger plan's 1994 year because the plan provided:
The employer contribution for each plan year shall be
delivered to the custodian not later than the due date for
filing the employer's income tax return for its fiscal year in
which the plan ends, including extensions thereof.
Petitioner points out that he made the required contributions to the Wenger plan on or before October 16, 1995, the due date of his income tax return, including extensions thereof. Petitioner contends that because the prototype*191 plan document sponsored by Charles Schwab, the plan adopted by petitioner as the Wenger plan, received a determination letter approving the language of the plan, the language of the plan should control whether a timely contribution was made. We disagree.
The minimum funding standards appear in
*192 The procedures for the issuance of determination letters are set out in section 601.201(o), Statement of Procedural Rules. Pursuant to section 601.201(o)(2), Statement of Procedural Rules, a determination letter may be issued involving the provisions of
Notwithstanding*193 the foregoing, petitioner relies on IRS Publication 560, Retirement Plans for the Self-Employed (Pub. 560) for the proposition that for the purpose of minimum funding standards, contributions can be retroactively applied to the previous year if the contributions are made by the due date of the employer's return plus extensions. Although Pub. 560 does provide that the last date for contribution to a plan such as the Wenger plan is the due date of the employer's return plus extensions, that language appears under the heading "Contributions" and deals with the deductibility of such contributions by the employer.
Even if Pub. 560 could be construed to suggest that a contribution will be deemed timely for minimum funding standard purposes if made by the due date of the employer's return plus extensions, it is clear that the sources of authoritative law in the area of Federal taxation are the relevant statutes, regulations, and judicial decisions and not informal publications issued by the Internal Revenue Service. See
Finally, petitioner seeks to have us redress the timing difference between
Accordingly, petitioner did not make a timely contribution to the Wenger plan for purposes of the minimum funding standard of
To reflect our disposition of the disputed issue, as well as petitioner's concession,
Decision will be entered for respondent.
1. All section references are to the Internal Revenue Code, as amended, and all Rule references are to the Tax Court Rules of Practice and Procedure. All amounts are rounded to the nearest dollar.↩
2. There is no indication that petitioner applied for waiver of the minimum funding standards on the ground of business hardship as provided under
3. Petitioner concedes that if a funding deficiency exists with respect to his money purchase pension plan for 1994, then he is liable for the addition to tax for failure to timely file an excise tax return.↩
4. Cf.
The rules of this section relating to the time a
contribution to a plan is deemed made for purposes of the
minimum funding standard under
the rules contained in
contribution to a plan is deemed made for the purposes of
claiming a deduction for such contribution under
D.J. Lee, M.D., Inc. v. Commissioner of Internal Revenue , 931 F.2d 418 ( 1991 )
Ferris L. Johnson and Jettie L. Johnson v. Commissioner of ... , 620 F.2d 153 ( 1980 )
Irving A. Adler v. Commissioner of Internal Revenue , 330 F.2d 91 ( 1964 )
Dixon v. United States , 85 S. Ct. 1301 ( 1965 )
Carter v. Commissioner , 51 T.C. 932 ( 1969 )
D.J. Lee, M.D., Inc. v. Commissioner , 10 Employee Benefits Cas. (BNA) 1905 ( 1989 )