Court Opinion

ID: 4484183
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:16:33.990287+00
Date Added: 2024-06-11T15:03:46.376976
License: Public Domain

Nims, J., concurring: Because on its face it may appear unreasonable to require comparability between the salaried and union plans, I think it is important to emphasize the significance of the parties’ stipulation that the salaried plan, standing alone, does not qualify under section 401(a)(3)(A) or (B).1 This being the case, petitioner must hope for success by treating the salaried and union plans as a single plan, as permitted under section 1.401-3(f), Income Tax Regs.2  While the parties have also stipulated that the three plans, when considered as one, do satisfy the coverage requirements of section 401(a)(3)(A) for the entire period, nevertheless the combined plan does not qualify under section 401(a)(4), as the Court here holds. Thus the salaried plan, even though it might have passed muster under section 401(a)(4) if considered separately (which petitioner was entitled to have done under applicable regulations and rulings),3 must still fail because it failed separately under section 401(a)(3). Accordingly, this case does not present an appropriate opportunity for the Court to give further consideration to the approach taken in the line of cases culminating in Loevsky v. Commissioner, supra, and Babst Services, Inc. v. Commissioner, supra, even if the Court were inclined to do so at this late date. In any event, as our opinion indicates, Congress in 1974 ameliorated prospectively the harshness of old section 401(a)(3) and section 401(a)(4).   In this connection, see Rev. Rul. 66-12, 1966-1 C.B. 72; Rev. Rul. 68-244, 1968-1 C.B. 158; Rev. Rul. 70-200, 1970-1 C.B. 101; Rev. Rul. 74-255, 1974-1 C.B. 93; Rev. Rul. 74-256, 1974-1 C.B. 94.    Sec. 1.401-3(f), Income Tax Regs., reads as follows: (f) An employer may designate several trusts or a trust or .trusts and an annuity plan or plans as constituting one plan which is intended to qualify under section 401(a)(3), in which case all of such trusts and plans taken as a whole may meet the requirements of such section. The fact that such combination of trusts and plans fails to qualify as one plan does not prevent such of the trusts and plans as qualify from meeting the requirements of section 401(a).    See sec. 1.401-4(a)(1)(i), Income Tax Regs.; Rev. Rul. 76-250, 1976-2 C.B. 124, Rev. Rul. 79-348, 1979-2 C.B. 161.