Amended 1988, 1989
- 1989 Pub. L. 101-140 Pub. L. 101–140 amended this section to read as if amendments by Pub. L. 100–647, § 1011B(a)(27)(A), had not been enacted, see 1988 Amendment note below.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(27)(A), redesignated former subsec. (c) as (d).
(a) General rule If—
(1) an employer maintains a welfare benefit fund, and
(2) 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.
Cited by 2
(b) Disqualified benefit For purposes of subsection (a)—
Amended 1986, 1988, 1989
- 1989 Pub. L. 101-140 Pub. L. 101–140 amended subsec. (b) to read as if amendments by Pub. L. 100–647, § 1011B(a)(27)(B), had not been enacted, see 1988 Amendment note below.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(27)(B), added par. (5) relating to limitation in case of benefits to which section 89 applies.
- 1986 Pub. L. 99-514 Pub. L. 99–514 amended subsec. (b) generally. Prior to amendment, subsec. (b) read as follows: “For purposes of subsection (a), the term ‘disqualified benefit’ means—
“(1) any medical benefit or life insurance benefit provided with respect to a key employee other than from a separate account established for such owner under section 419A(d), and
“(2) any post-retirement medical or life insurance benefit unless the plan meets the requirements of section 505(b)(1) with respect to such benefit, and
“(3) any portion of such fund reverting to the benefit of the employer.”
(1) In general The term “disqualified benefit” means—
Cited by 3
(A) 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,
Cited by 1
(B) 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
Cited by 2
(C) any portion of a welfare benefit fund reverting to the benefit of the employer.
Cited by 1
(2) Exception for collective bargaining plans 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.
(3) Exception for nondeductible contributions 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)).
Cited by 1
(4) Exception for certain amounts charged against existing reserve 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.
(c) Definitions 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.
Amended 1988, 1989
- 1989 Pub. L. 101-140 Pub. L. 101–140 amended this section to read as if amendments by Pub. L. 100–647, § 1011B(a)(27)(A), had not been enacted, see 1988 Amendment note below.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 1011B(a)(27)(A), added subsec. (c) relating to tax on funded welfare benefit funds which include discriminatory employee benefit plan. Former subsec. (c) redesignated (d).
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 3021(a)(1)(C)(i), substituted “any testing year (as defined in section 89(j)(13))” for “any plan year”, see Codification note above.
- 1988 Pub. L. 100-647 Pub. L. 100–647, § 3021(a)(1)(C)(ii), substituted “testing” for “plan” in cls. (i) and (ii), see Codification note above.