Brief Case
Pension Resource

I.R.C. § 4975

Tax on prohibited transactions
USC 2001 ed., current through 2002-01-22 · superseded Jan 19, 2004 · last amended by Pub. L. 107-22
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(a) Initial taxes on disqualified person There is hereby imposed a tax on each prohibited transaction. The rate of tax shall be equal to 15 percent of the amount involved with respect to the prohibited transaction for each year (or part thereof) in the taxable period. The tax imposed by this subsection shall be paid by any disqualified person who participates in the prohibited transaction (other than a fiduciary acting only as such).
(b) Additional taxes on disqualified person In any case in which an initial tax is imposed by subsection (a) on a prohibited transaction and the transaction is not corrected within the taxable period, there is hereby imposed a tax equal to 100 percent of the amount involved. The tax imposed by this subsection shall be paid by any disqualified person who participated in the prohibited transaction (other than a fiduciary acting only as such).
(c) Prohibited transaction
(1) General rule For purposes of this section, the term “prohibited transaction” means any direct or indirect—
(A) sale or exchange, or leasing, of any property between a plan and a disqualified person;
(B) lending of money or other extension of credit between a plan and a disqualified person;
(C) furnishing of goods, services, or facilities between a plan and a disqualified person;
(D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan;
(E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interests or for his own account; or
(F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan.
(2) Special exemption The Secretary shall establish an exemption procedure for purposes of this subsection. Pursuant to such procedure, he may grant a conditional or unconditional exemption of any disqualified person or transaction, orders of disqualified persons or transactions, from all or part of the restrictions imposed by paragraph (1) of this subsection. Action under this subparagraph may be taken only after consultation and coordination with the Secretary of Labor. The Secretary may not grant an exemption under this paragraph unless he finds that such exemption is—
(A) administratively feasible,
(B) in the interests of the plan and of its participants and beneficiaries, and
(C) protective of the rights of participants and beneficiaries of the plan.
Before granting an exemption under this paragraph, the Secretary shall require adequate notice to be given to interested persons and shall publish notice in the Federal Register of the pendency of such exemption and shall afford interested persons an opportunity to present views. No exemption may be granted under this paragraph with respect to a transaction described in subparagraph (E) or (F) of paragraph (1) unless the Secretary affords an opportunity for a hearing and makes a determination on the record with respect to the findings required under subparagraphs (A), (B), and (C) of this paragraph, except that in lieu of such hearing the Secretary may accept any record made by the Secretary of Labor with respect to an application for exemption under section 408(a) of title I of the Employee Retirement Income Security Act of 1974.
(3) Special rule for individual retirement accounts An individual for whose benefit an individual retirement account is established and his beneficiaries shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if, with respect to such transaction, the account ceases to be an individual retirement account by reason of the application of section 408(e)(2)(A) or if section 408(e)(4) applies to such account.
(4) Special rule for Archer MSAs An individual for whose benefit an Archer MSA (within the meaning of section 220(d)) is established shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if section 220(e)(2) applies to such transaction.
(5) Special rule for Coverdell education savings accounts An individual for whose benefit a Coverdell education savings account is established and any contributor to such account shall be exempt from the tax imposed by this section with respect to any transaction concerning such account (which would otherwise be taxable under this section) if section 530(d) applies with respect to such transaction.
(d) Exemptions Except as provided in subsection (f)(6), the prohibitions provided in subsection (c) shall not apply to—
(1) any loan made by the plan to a disqualified person who is a participant or beneficiary of the plan if such loan—
(A) is available to all such participants or beneficiaries on a reasonably equivalent basis,
(B) is not made available to highly compensated employees (within the meaning of section 414(q)) in an amount greater than the amount made available to other employees,
(C) is made in accordance with specific provisions regarding such loans set forth in the plan,
(D) bears a reasonable rate of interest, and
(E) is adequately secured;
(2) any contract, or reasonable arrangement, made with a disqualified person for office space, or legal, accounting, or other services necessary for the establishment or operation of the plan, if no more than reasonable compensation is paid therefor;
(3) any loan to an 1 leveraged employee stock ownership plan (as defined in subsection (e)(7)), if—
(A) such loan is primarily for the benefit of participants and beneficiaries of the plan, and
(B) such loan is at a reasonable rate of interest, and any collateral which is given to a disqualified person by the plan consists only of qualifying employer securities (as defined in subsection (e)(8));
(4) the investment of all or part of a plan's assets in deposits which bear a reasonable interest rate in a bank or similar financial institution supervised by the United States or a State, if such bank or other institution is a fiduciary of such plan and if—
(A) the plan covers only employees of such bank or other institution and employees of affiliates of such bank or other institution, or
(B) such investment is expressly authorized by a provision of the plan or by a fiduciary (other than such bank or institution or affiliates thereof) who is expressly empowered by the plan to so instruct the trustee with respect to such investment;
(5) any contract for life insurance, health insurance, or annuities with one or more insurers which are qualified to do business in a State if the plan pays no more than adequate consideration, and if each such insurer or insurers is—
(A) the employer maintaining the plan, or
(B) a disqualified person which is wholly owned (directly or indirectly) by the employer establishing the plan, or by any person which is a disqualified person with respect to the plan, but only if the total premiums and annuity considerations written by such insurers for life insurance, health insurance, or annuities for all plans (and their employers) with respect to which such insurers are disqualified persons (not including premiums or annuity considerations written by the employer maintaining the plan) do not exceed 5 percent of the total premiums and annuity considerations written for all lines of insurance in that year by such insurers (not including premiums or annuity considerations written by the employer maintaining the plan);
(6) the provision of any ancillary service by a bank or similar financial institution supervised by the United States or a State, if such service is provided at not more than reasonable compensation, if such bank or other institution is a fiduciary of such plan, and if—
(A) such bank or similar financial institution has adopted adequate internal safeguards which assure that the provision of such ancillary service is consistent with sound banking and financial practice, as determined by Federal or State supervisory authority, and
(B) the extent to which such ancillary service is provided is subject to specific guidelines issued by such bank or similar financial institution (as determined by the Secretary after consultation with Federal and State supervisory authority), and under such guidelines the bank or similar financial institution does not provide such ancillary service—
(i) in an excessive or unreasonable manner, and
(ii) in a manner that would be inconsistent with the best interests of participants and beneficiaries of employee benefit plans;
(7) the exercise of a privilege to convert securities, to the extent provided in regulations of the Secretary but only if the plan receives no less than adequate consideration pursuant to such conversion;
(8) any transaction between a plan and a common or collective trust fund or pooled investment fund maintained by a disqualified person which is a bank or trust company supervised by a State or Federal agency or between a plan and a pooled investment fund of an insurance company qualified to do business in a State if—
(A) the transaction is a sale or purchase of an interest in the fund,
(B) the bank, trust company, or insurance company receives not more than a reasonable compensation, and
(C) such transaction is expressly permitted by the instrument under which the plan is maintained, or by a fiduciary (other than the bank, trust company, or insurance company, or an affiliate thereof) who has authority to manage and control the assets of the plan;
(9) receipt by a disqualified person of any benefit to which he may be entitled as a participant or beneficiary in the plan, so long as the benefit is computed and paid on a basis which is consistent with the terms of the plan as applied to all other participants and beneficiaries;
(10) receipt by a disqualified person of any reasonable compensation for services rendered, or for the reimbursement of expenses properly and actually incurred, in the performance of his duties with the plan, but no person so serving who already receives full-time pay from an employer or an association of employers, whose employees are participants in the plan or from an employee organization whose members are participants in such plan shall receive compensation from such fund, except for reimbursement of expenses properly and actually incurred;
(11) service by a disqualified person as a fiduciary in addition to being an officer, employee, agent, or other representative of a disqualified person;
(12) the making by a fiduciary of a distribution of the assets of the trust in accordance with the terms of the plan if such assets are distributed in the same manner as provided under section 4044 of title IV of the Employee Retirement Income Security Act of 1974 (relating to allocation of assets);
(13) any transaction which is exempt from section 406 of such Act by reason of section 408(e) of such Act (or which would be so exempt if such section 406 applied to such transaction) or which is exempt from section 406 of such Act by reason of section 408(b)(12) of such Act;
(14) any transaction required or permitted under part 1 of subtitle E of title IV or section 4223 of the Employee Retirement Income Security Act of 1974, but this paragraph shall not apply with respect to the application of subsection (c)(1) (E) or (F); or
(15) a merger of multiemployer plans, or the transfer of assets or liabilities between multiemployer plans, determined by the Pension Benefit Guaranty Corporation to meet the requirements of section 4231 of such Act, but this paragraph shall not apply with respect to the application of subsection (c)(1) (E) or (F).
(e) Definitions
(1) Plan For purposes of this section, the term “plan” means—
(A) a trust described in section 401(a) which forms a part of a plan, or a plan described in section 403(a), which trust or plan is exempt from tax under section 501(a),
(B) an individual retirement account described in section 408(a),
(C) an individual retirement annuity described in section 408(b),
(D) an Archer MSA described in section 220(d),
(E) a Coverdell education savings account described in section 530, or
(F) a trust, plan, account, or annuity which, at any time, has been determined by the Secretary to be described in any preceding subparagraph of this paragraph.
(2) Disqualified person For purposes of this section, the term “disqualified person” means a person who is—
(A) a fiduciary;
(B) a person providing services to the plan;
(C) an employer any of whose employees are covered by the plan;
(D) an employee organization any of whose members are covered by the plan;
(E) an owner, direct or indirect, of 50 percent or more of—
(i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of a corporation,
(ii) the capital interest or the profits interest of a partnership, or
(iii) the beneficial interest of a trust or unincorporated enterprise,
which is an employer or an employee organization described in subparagraph (C) or (D);
(F) a member of the family (as defined in paragraph (6)) of any individual described in subparagraph (A), (B), (C), or (E);
(G) a corporation, partnership, or trust or estate of which (or in which) 50 percent or more of—
(i) the combined voting power of all classes of stock entitled to vote or the total value of shares of all classes of stock of such corporation,
(ii) the capital interest or profits interest of such partnership, or
(iii) the beneficial interest of such trust or estate,
is owned directly or indirectly, or held by persons described in subparagraph (A), (B), (C), (D), or (E);
(H) an officer, director (or an individual having powers or responsibilities similar to those of officers or directors), a 10 percent or more shareholder, or a highly compensated employee (earning 10 percent or more of the yearly wages of an employer) of a person described in subparagraph (C), (D), (E), or (G); or
(I) a 10 percent or more (in capital or profits) partner or joint venturer of a person described in subparagraph (C), (D), (E), or (G).
The Secretary, after consultation and coordination with the Secretary of Labor or his delegate, may by regulation prescribe a percentage lower than 50 percent for subparagraphs (E) and (G) and lower than 10 percent for subparagraphs (H) and (I).
(3) Fiduciary For purposes of this section, the term “fiduciary” means any person who—
(A) exercises any discretionary authority or discretionary control respecting management of such plan or exercises any authority or control respecting management or disposition of its assets,
(B) renders investment advice for a fee or other compensation, direct or indirect, with respect to any moneys or other property of such plan, or has any authority or responsibility to do so, or
(C) has any discretionary authority or discretionary responsibility in the administration of such plan.
Such term includes any person designated under section 405(c)(1)(B) of the Employee Retirement Income Security Act of 1974.
(4) Stockholdings For purposes of paragraphs (2)(E)(i) and (G)(i) there shall be taken into account indirect stockholdings which would be taken into account under section 267(c), except that, for purposes of this paragraph, section 267(c)(4) shall be treated as providing that the members of the family of an individual are the members within the meaning of paragraph (6).
(5) Partnerships; trusts For purposes of paragraphs (2)(E)(ii) and (iii), (G)(ii) and (iii), and (I) the ownership of profits or beneficial interests shall be determined in accordance with the rules for constructive ownership of stock provided in section 267(c) (other than paragraph (3) thereof), except that section 267(c)(4) shall be treated as providing that the members of the family of an individual are the members within the meaning of paragraph (6).
(6) Member of family For purposes of paragraph (2)(F), the family of any individual shall include his spouse, ancestor, lineal descendant, and any spouse of a lineal descendant.
(7) Employee stock ownership plan The term “employee stock ownership plan” means a defined contribution plan—
(A) which is a stock bonus plan which is qualified, or a stock bonus and a money purchase plan both of which are qualified under section 401(a), and which are designed to invest primarily in qualifying employer securities; and
(B) which is otherwise defined in regulations prescribed by the Secretary.
A plan shall not be treated as an employee stock ownership plan unless it meets the requirements of section 409(h), section 409(o), and, if applicable, section 409(n), section 409(p), and section 664(g) and, if the employer has a registration-type class of securities (as defined in section 409(e)(4)), it meets the requirements of section 409(e).
(8) Qualifying employer security The term “qualifying employer security” means any employer security within the meaning of section 409(l). If any moneys or other property of a plan are invested in shares of an investment company registered under the Investment Company Act of 1940, the investment shall not cause that investment company or that investment company's investment adviser or principal underwriter to be treated as a fiduciary or a disqualified person for purposes of this section, except when an investment company or its investment adviser or principal underwriter acts in connection with a plan covering employees of the investment company, its investment adviser, or its principal underwriter.
(9) Section made applicable to withdrawal liability payment funds For purposes of this section—
(A) In general The term “plan” includes a trust described in section 501(c)(22).
(B) Disqualified person In the case of any trust to which this section applies by reason of subparagraph (A), the term “disqualified person” includes any person who is a disqualified person with respect to any plan to which such trust is permitted to make payments under section 4223 of the Employee Retirement Income Security Act of 1974.
(f) Other definitions and special rules For purposes of this section—
(1) Joint and several liability If more than one person is liable under subsection (a) or (b) with respect to any one prohibited transaction, all such persons shall be jointly and severally liable under such subsection with respect to such transaction.
(2) Taxable period The term “taxable period” means, with respect to any prohibited transaction, the period beginning with the date on which the prohibited transaction occurs and ending on the earliest of—
(A) the date of mailing a notice of deficiency with respect to the tax imposed by subsection (a) under section 6212,
(B) the date on which the tax imposed by subsection (a) is assessed, or
(C) the date on which correction of the prohibited transaction is completed.
(3) Sale or exchange; encumbered property A transfer or real or personal property by a disqualified person to a plan shall be treated as a sale or exchange if the property is subject to a mortgage or similar lien which the plan assumes or if it is subject to a mortgage or similar lien which a disqualified person placed on the property within the 10-year period ending on the date of the transfer.
(4) Amount involved The term “amount involved” means, with respect to a prohibited transaction, the greater of the amount of money and the fair market value of the other property given or the amount of money and the fair market value of the other property received; except that, in the case of services described in paragraphs (2) and (10) of subsection (d) the amount involved shall be only the excess compensation. For purposes of the preceding sentence, the fair market value—
(A) in the case of the tax imposed by subsection (a), shall be determined as of the date on which the prohibited transaction occurs; and
(B) in the case of the tax imposed by subsection (b), shall be the highest fair market value during the taxable period.
(5) Correction The terms “correction” and “correct” mean, with respect to a prohibited transaction, undoing the transaction to the extent possible, but in any case placing the plan in a financial position not worse than that in which it would be if the disqualified person were acting under the highest fiduciary standards.
(6) Exemptions not to apply to certain transactions
(A) In general In the case of a trust described in section 401(a) which is part of a plan providing contributions or benefits for employees some or all of whom are owner-employees (as defined in section 401(c)(3)), the exemptions provided by subsection (d) (other than paragraphs (9) and (12)) shall not apply to a transaction in which the plan directly or indirectly—
(i) lends any part of the corpus or income of the plan to,
(ii) pays any compensation for personal services rendered to the plan to, or
(iii) acquires for the plan any property from, or sells any property to,
any such owner-employee, a member of the family (as defined in section 267(c)(4)) of any such owner-employee, or any corporation in which any such owner-employee owns, directly or indirectly, 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation.
(B) Special rules for shareholder-employees, etc.
(i) In general For purposes of subparagraph (A), the following shall be treated as owner-employees:
(I) A shareholder-employee.
(II) A participant or beneficiary of an individual retirement plan (as defined in section 7701(a)(37)).
(III) An employer or association of employees which establishes such an individual retirement plan under section 408(c).
(ii) Exception for certain transactions involving shareholder-employees Subparagraph (A)(iii) shall not apply to a transaction which consists of a sale of employer securities to an employee stock ownership plan (as defined in subsection (e)(7)) by a shareholder-employee, a member of the family (as defined in section 267(c)(4)) of such shareholder-employee, or a corporation in which such a shareholder-employee owns stock representing a 50 percent or greater interest described in subparagraph (A).
(iii) Loan exception For purposes of subparagraph (A)(i), the term “owner-employee” shall only include a person described in subclause (II) or (III) of clause (i).
(C) Shareholder-employee For purposes of subparagraph (B), the term “shareholder-employee” means an employee or officer of an S corporation who owns (or is considered as owning within the meaning of section 318(a)(1)) more than 5 percent of the outstanding stock of the corporation on any day during the taxable year of such corporation.
(g) Application of section This section shall not apply—
(1) in the case of a plan to which a guaranteed benefit policy (as defined in section 401(b)(2)(B) of the Employee Retirement Income Security Act of 1974) is issued, to any assets of the insurance company, insurance service, or insurance organization merely because of its issuance of such policy;
(2) to a governmental plan (within the meaning of section 414(d)); or
(3) to a church plan (within the meaning of section 414(e)) with respect to which the election provided by section 410(d) has not been made.
In the case of a plan which invests in any security issued by an investment company registered under the Investment Company Act of 1940, the assets of such plan shall be deemed to include such security but shall not, by reason of such investment, be deemed to include any assets of such company.
(h) Notification of Secretary of Labor Before sending a notice of deficiency with respect to the tax imposed by subsection (a) or (b), the Secretary shall notify the Secretary of Labor and provide him a reasonable opportunity to obtain a correction of the prohibited transaction or to comment on the imposition of such tax.
(i) Cross reference For provisions concerning coordination procedures between Secretary of Labor and Secretary of the Treasury with respect to application of tax imposed by this section and for authority to waive imposition of the tax imposed by subsection (b), see section 3003 of the Employee Retirement Income Security Act of 1974.
Source credit, amendments & notes

(Added Pub. L. 93–406, title II, §2003(a), Sept. 2, 1974, 88 Stat. 971; amended Pub. L. 94–455, title XIX, §1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1834; Pub. L. 95–600, title I, §141(f)(5), (6), Nov. 6, 1978, 92 Stat. 2795; Pub. L. 96–222, title I, §101(a)(7)(C), (K), (L)(iv)(III), (v)(XI), Apr. 1, 1980, 94 Stat. 198–201; Pub. L. 96–364, title II, §§208(b), 209(b), Sept. 26, 1980, 94 Stat. 1289, 1290; Pub. L. 96–596, §2(a)(1)(K),(L), (2)(I), (3)(F), Dec. 24, 1980, 94 Stat. 3469, 3471; Pub. L. 97–448, title III, §305(d)(5), Jan. 12, 1983, 96 Stat. 2400; Pub. L. 98–369, div. A, title IV, §491(d)(45), (46), (e)(7), (8), July 18, 1984, 98 Stat. 851–853; Pub. L. 99–514, title XI, §1114(b)(15)(A), title XVIII, §§1854(f)(3)(A), 1899A(51), Oct. 22, 1986, 100 Stat. 2452, 2882, 2961; Pub. L. 101–508, title XI, §11701(m), Nov. 5, 1990, 104 Stat. 1388–513; Pub. L. 104–188, title I, §§1453(a), 1702(g)(3), Aug. 20, 1996, 110 Stat. 1817, 1873; Pub. L. 104–191, title III, §301(f), Aug. 21, 1996, 110 Stat. 2051; Pub. L. 105–34, title II, §213(b), title X, §1074(a), title XV, §§1506(b)(1), 1530(c)(10), title XVI, §1602(a)(5), Aug. 5, 1997, 111 Stat. 816, 949, 1065, 1079, 1094; Pub. L. 105–206, title VI, §6023(19), July 22, 1998, 112 Stat. 825; Pub. L. 106–554, §1(a)(7) [title II, §202(a)(7), (b)(7), (10)], Dec. 21, 2000, 114 Stat. 2763, 2763A–628, 2763A–629; Pub. L. 107–16, title VI, §§612(a), 656(b), June 7, 2001, 115 Stat. 100, 134; Pub. L. 107–22, §1(b)(1)(D), (3)(D), July 26, 2001, 115 Stat. 197.)

Amendment of Section

For termination of amendment by section 901 of Pub. L. 107–16, see Effective and Termination Dates of 2001 Amendment note below.

References in Text

The Employee Retirement Income Security Act of 1974, referred to in subsecs. (c)(2), (d)(12) to (15), (e)(3), (9)(B), (g)(1), and (i) is Pub. L. 93–406, Sept. 2, 1974, 88 Stat. 829, as amended. Part 1 of subtitle E of title IV of such Act is classified generally to part 1 (29 U.S.C. 1381 et seq.) of subtitle E of subchapter III of chapter 18 of Title 29, Labor. Sections 401, 405, 406, 408, 3003, 4044, 4223, and 4231 of such Act are classified to sections 1101, 1105, 1106, 1108, 1203, 1344, 1403, and 1411, respectively, of Title 29. For complete classification of this Act to the Code, see Short Title note set out under section 1001 of Title 29 and Tables.

The Investment Company Act of 1940, referred to in subsecs. (e)(8) and (g), is title I of act Aug. 22, 1940, ch. 686, 54 Stat. 789, as amended, which is classified generally to subchapter I (§80a–1 et seq.) of chapter 2D of Title 15, Commerce and Trade. For complete classification of this Act to the Code, see section 80a–51 of Title 15 and Tables.

Amendments

2001—Subsec. (c)(5). Pub. L. 107–22, §1(b)(1)(D), (3)(D), in heading, substituted “Coverdell education savings” for “education individual retirement” and in text, substituted “a Coverdell education savings” for “an education individual retirement”.

Subsec. (e)(1)(E). Pub. L. 107–22, §1(b)(1)(D), substituted “a Coverdell education savings” for “an education individual retirement”.

Subsec. (e)(7). Pub. L. 107–16, §§656(b), 901, temporarily inserted “, section 409(p),” after “409(n)” in concluding provisions. See Effective and Termination Dates of 2001 Amendment note below.

Subsec. (f)(6)(B)(iii). Pub. L. 107–16, §§612(a), 901, temporarily added cl. (iii). See Effective and Termination Dates of 2001 Amendment note below.

2000—Subsec. (c)(4). Pub. L. 106–554, §1(a)(7) [title II, §202(b)(10)], substituted “an Archer” for “a Archer”.

Pub. L. 106–554, §1(a)(7) [title II, §202(a)(7), (b)(7)], substituted “Archer MSAs” for “medical savings accounts” in heading and “Archer MSA” for “medical savings account” in text.

Subsec. (e)(1)(D). Pub. L. 106–554, §1(a)(7) [title II, §202(b)(10)], substituted “an Archer” for “a Archer”.

Pub. L. 106–554, §1(a)(7) [title II, §202(a)(7)], substituted “Archer MSA” for “medical savings account”.

1998—Subsec. (c)(3). Pub. L. 105–206, §6023(19)(A), substituted “exempt from the tax” for “exempt for the tax”.

Subsec. (i). Pub. L. 105–206, §6023(19)(B), substituted “Secretary of the Treasury” for “Secretary of Treasury”.

1997—Subsec. (a). Pub. L. 105–34, §1074(a), substituted “15 percent” for “10 percent”.

Subsec. (c)(4). Pub. L. 105–34, §1602(a)(5), substituted “if section 220(e)(2) applies to such transaction.” for “if, with respect to such transaction, the account ceases to be a medical savings account by reason of the application of section 220(e)(2) to such account.”

Subsec. (c)(5). Pub. L. 105–34, §213(b)(2), added par. (5).

Subsec. (d). Pub. L. 105–34, §1506(b)(1)(B)(ii), struck out concluding provisions which read as follows: “The exemptions provided by this subsection (other than paragraphs (9) and (12)) shall not apply to any transaction with respect to a trust described in section 401(a) which is part of a plan providing contributions or benefits for employees some or all of whom are owner-employees (as defined in section 401(c)(3)) in which a plan directly or indirectly lends any part of the corpus or income of the plan to, pays any compensation for personal services rendered to the plan to, or acquires for the plan any property from or sells any property to, any such owner-employee, a member of the family (as defined in section 267(c)(4)) of any such owner-employee, or a corporation controlled by any such owner-employee through the ownership, directly or indirectly, of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation. For purposes of the preceding sentence, a shareholder-employee (as defined in section 1379, as in effect on the day before the date of the enactment of the Subchapter S Revision Act of 1982), a participant or beneficiary of an individual retirement account or an individual retirement annuity (as defined in section 408), and an employer or association of employees which establishes such an account or annuity under section 408(c) shall be deemed to be an owner-employee.”

Pub. L. 105–34, §1506(b)(1)(B)(i), substituted “Except as provided in subsection (f)(6), the prohibitions” for “The prohibitions” in introductory provisions.

Subsec. (e)(1)(D) to (F). Pub. L. 105–34, §213(b)(1), struck out “or” at end of subpar. (D), added subpar. (E), and redesignated former subpar. (E) as (F).

Subsec. (e)(7). Pub. L. 105–34, §1530(c)(10), inserted “and section 664(g)” after “section 409(n)” in concluding provisions.

Subsec. (f)(6). Pub. L. 105–34, §1506(b)(1)(A), added par. (6).

1996—Subsec. (a). Pub. L. 104–188, §1453(a), substituted “10 percent” for “5 percent”.

Subsec. (c)(4). Pub. L. 104–191, §301(f)(1), added par. (4).

Subsec. (d)(13). Pub. L. 104–188, §1702(g)(3), substituted “408(b)(12)” for “408(b)”.

Subsec. (e)(1). Pub. L. 104–191, §301(f)(2), reenacted heading without change and amended text generally. Prior to amendment, text read as follows: “For purposes of this section, the term ‘plan’ means a trust described in section 401(a) which forms a part of a plan, or a plan described in section 403(a), which trust or plan is exempt from tax under section 501(a), an individual retirement account described in section 408(a) or an individual retirement annuity described in section 408(b) (or a trust, plan, account, or annuity which, at any time, has been determined by the Secretary to be such a trust, plan, or account).”

1990—Subsec. (d)(13). Pub. L. 101–508 inserted before semicolon at end “or which is exempt from section 406 of such Act by reason of section 408(b) of such Act”.

1986—Subsec. (d). Pub. L. 99–514, §1899A(51), inserted a closing parenthesis after “and (12)” in second sentence.

Subsec. (d)(1)(B). Pub. L. 99–514, §1114(b)(15)(A), substituted “highly compensated employees (within the meaning of section 414(q))” for “highly compensated employees, officers, or shareholders”.

Subsec. (e)(7). Pub. L. 99–514, §1854(f)(3)(A), inserted “, section 409(o), and, if applicable, section 409(n)” in last sentence.

1984—Subsec. (d). Pub. L. 98–369, §491(d)(45), substituted in provision following par. (15) “or an individual retirement annuity (as defined in section 408)” for “, individual retirement annuity, or an individual retirement bond (as defined in section 408 or 409)”.

Subsec. (e)(1). Pub. L. 98–369, §491(d)(46), struck out “or 405(a)” after “section 403(a)” and “or a retirement bond described in section 409” after “section 408(b)”, and substituted “or annuity” for “annuity, or bond” and “or account” for “account, or bond”.

Subsec. (e)(7). Pub. L. 98–369, §491(e)(7), substituted “section 409(h)” for “section 409A(h)”, “section 409(e)(4)” for “section 409A(e)(4)”, and “section 409(e)” for “section 409A(e)”.

Subsec. (e)(8). Pub. L. 98–369, §491(e)(8), substituted “section 409(l)” for “section 409A(l)”.

1983—Subsec. (d). Pub. L. 97–448 inserted “, as in effect on the day before the date of the enactment of the Subchapter S Revision Act of 1982” after “section 1379” in last sentence.

1980—Subsec. (b). Pub. L. 96–596, §2(a)(1)(K), substituted “taxable period” for “correction period”.

Subsec. (d)(14), (15). Pub. L. 96–364, §208(b), added pars. (14) and (15).

Subsec. (e)(7). Pub. L. 96–222, §101(a)(7)(K), (L)(iv)(III), (v)(XI), substituted references to an employee stock ownership plan, for references to a leveraged employee stock ownership plan wherever appearing therein, and substituted provisions relating to treatment of a plan as an employee stock ownership plan, for provisions relating to treatment of a plan as a leveraged employee stock ownership plan.

Subsec. (e)(8). Pub. L. 96–222, §101(a)(7)(C), substituted provisions defining “qualifying employer security” within the meaning of section 409A(l), for provisions defining such term as stock, or otherwise an equity security, or within the meaning of section 503(e)(1) to (3).

Subsec. (e)(9). Pub. L. 96–364, §209(b), added par. (9).

Subsec. (f)(2)(B), (C). Pub. L. 96–596, §2(a)(2)(I), added subpar. (B) and redesignated former subpar. (B) as (C).

Subsec. (f)(4)(B). Pub. L. 96–596, §2(a)(1)(L), substituted “taxable period” for “correction period”.

Subsec. (f)(6). Pub. L. 96–596, §2(a)(3)(F), struck out par. (6), which defined correction period, with respect to a prohibited transaction, as the period beginning on the date on which the prohibited transaction occurs and ending 90 days after the date of mailing of a notice of deficiency with respect to the tax imposed by subsec. (b) of this section under section 6212 of this title, extended by any period in which a deficiency cannot be assessed under section 6213(a) of this title and any other period which the Secretary determines is reasonable and necessary to bring about the correction of the prohibited transaction.

1978—Subsec. (d)(3). Pub. L. 95–600, §141(f)(6), substituted “leveraged employee” for “employee”.

Subsec. (e)(7). Pub. L. 95–600, §141(f)(5), substituted in heading “Leveraged employee” for “Employee”, and in text, “leveraged employee” for “employee” and inserted provision that a plan not be treated as a leveraged employee stock ownership plan unless it meet the requirements of section 409A(e) and (h).

1976—Subsecs. (c) to (f). Pub. L. 94–455 struck out “or his delegate” after “Secretary” wherever appearing.

Effective and Termination Dates of 2001 Amendments

Amendment by Pub. L. 107–22 effective July 26, 2001, see section 1(c) of Pub. L. 107–22, set out as a note under section 26 of this title.

Pub. L. 107–16, title VI, §612(c), June 7, 2001, 115 Stat. 100, provided that: “The amendment made by this section [amending this section and section 1108 of Title 29, Labor] shall apply to years beginning after December 31, 2001.”

Amendment by section 656(b) of Pub. L. 107–16 applicable to plan years beginning after Dec. 31, 2004, except that in the case of any employee stock ownership plan established after Mar. 14, 2001, or established on or before such date if employer securities held by the plan consist of stock in a corporation with respect to which an election under section 1362(a) of this title is not in effect on such date, amendment applicable to plan years ending after Mar. 14, 2001, see section 656(d) of Pub. L. 107–16, set out as a note under section 409 of this title.

Amendment by Pub. L. 107–16 inapplicable to taxable, plan, or limitation years beginning after Dec. 31, 2010, and the Internal Revenue Code of 1986 to be applied and administered to such years as if such amendment had never been enacted, see section 901 of Pub. L. 107–16, set out as a note under section 1 of this title.

Effective Date of 1997 Amendment

Amendment by section 213(b) of Pub. L. 105–34 applicable to taxable years beginning after Dec. 31, 1997, see section 213(f) of Pub. L. 105–34, set out as a note under section 26 of this title.

Section 1074(b) of Pub. L. 105–34 provided that: “The amendment made by this section [amending this section] shall apply to prohibited transactions occurring after the date of the enactment of this Act [Aug. 5, 1997].”

Amendment by section 1506(b)(1) of Pub. L. 105–34 applicable to taxable years beginning after Dec. 31, 1997, see section 1506(c) of Pub. L. 105–34, set out as a note under section 409 of this title.

Amendment by section 1530(c)(10) of Pub. L. 105–34 applicable to transfers made by trusts to, or for the use of, an employee stock ownership plan after Aug. 5, 1997, see section 1530(d) of Pub. L. 105–34, set out as a note under section 401 of this title.

Amendment by section 1602(a)(5) of Pub. L. 105–34 effective as if included in the provisions of the Health Insurance Portability and Accountability Act of 1996, Pub. L. 104–191, to which such amendment relates, see section 1602(i) of Pub. L. 105–34, set out as a note under section 26 of this title.

Effective Date of 1996 Amendments

Amendment by Pub. L. 104–191 applicable to taxable years beginning after Dec. 31, 1996, see section 301(j) of Pub. L. 104–191, set out as a note under section 62 of this title.

Section 1453(b) of Pub. L. 104–188 provided that: “The amendment made by this section [amending this section] shall apply to prohibited transactions occurring after the date of the enactment of this Act [Aug. 20, 1996].”

Amendment by section 1702(g)(3) of Pub. L. 104–188 effective, except as otherwise expressly provided, as if included in the provision of the Revenue Reconciliation Act of 1990, Pub. L. 101–508, title XI, to which such amendment relates, see section 1702(i) of Pub. L. 104–188, set out as a note under section 38 of this title.

Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508 effective, except as otherwise provided, as if included in the provision of the Revenue Reconciliation Act of 1989, Pub. L. 101–239, title VII, to which such amendment relates, see section 11701(n) of Pub. L. 101–508, set out as a note under section 42 of this title.

Effective Date of 1986 Amendment

Amendment by section 1114(b)(15)(A) of Pub. L. 99–514 applicable to years beginning after Dec. 31, 1988, see section 1114(c)(3) of Pub. L. 99–514, set out as a note under section 414 of this title.

Amendment by section 1854(f)(3)(A) of Pub. L. 99–514 effective Oct. 22, 1986, see section 1854(f)(4)(A) of Pub. L. 99–514, set out as a note under section 409 of this title.

Effective Date of 1984 Amendment

Amendment by section 491(d)(45), (46) of Pub. L. 98–369 applicable to obligations issued after Dec. 31, 1983, see section 491(f)(1) of Pub. L. 98–369, set out as a note under section 62 of this title.

Amendment by section 491(e)(7), (8) of Pub. L. 98–369 effective Jan. 1, 1984, see section 491(f)(3) of Pub. L. 98–369, set out as a note under section 401 of this title.

Effective Date of 1983 Amendment

Amendment by Pub. L. 97–448 effective on date of enactment of Subchapter S Revision Act of 1982 [Oct. 19, 1982], see section 311(c)(4) of Pub. L. 97–448, set out as a note under section 1368 of this title.

Effective Date of 1980 Amendments

For effective date of amendment by Pub. L. 96–596 with respect to any first tier tax and to any second tier tax, see section 2(d) of Pub. L. 96–596, set out as an Effective Date note under section 4961 of this title.

Amendment by section 208(b) of Pub. L. 96–364 effective Sept. 26, 1980, see section 210(a) of Pub. L. 96–364, set out as an Effective Date note under section 418 of this title.

Amendment by section 209(b) of Pub. L. 96–364 applicable to taxable years ending after Sept. 26, 1980, see section 210(c) of Pub. L. 96–364, set out as an Effective Date note under section 418 of this title.

Section 101(b)(1)(C) of Pub. L. 96–222 provided that: “The amendment made by subparagraph (C) of subsection (a)(6) [probably should be ‘(a)(7)’, which amended this section] shall apply to stock acquired after December 31, 1979.”

Amendment by section 101(a)(7)(K), (L)(iv)(III), (v)(XI) of Pub. L. 96–222 effective, except as otherwise provided, as if it had been included in the provision of the Revenue Act of 1978, Pub. L. 95–600, to which such amendment relates, see section 201 of Pub. L. 96–222, set out as a note under section 32 of this title.

Effective Date of 1978 Amendment

Section 141(h) of Pub. L. 95–600, as added by Pub. L. 96–222, title I, §101(a)(7)(B), Apr. 1, 1980, 94 Stat. 197; Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that: “Paragraphs (5) and (6) of subsection (f) [section 141(f)(5), (6) of Pub. L. 95–600] shall apply—

“(1) insofar as they make the requirements of subsections (e) and (h)(1)(B) of section 409A [now section 409] of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] applicable to section 4975 of such Code, to stock acquired after December 31, 1979, and

“(2) insofar as they make paragraphs (1)(A) and (2) of section 409A(h) [now section 409(h)] of such Code applicable to such section 4975, to distributions after December 31, 1978.”

Effective Date; Savings Provision

Section 2003(c) of Pub. L. 93–406, as amended by Pub. L. 99–514, §2, Oct. 22, 1986, 100 Stat. 2095, provided that:

“(1)(A) The amendments made by this section [enacting this section and amending section 503 of this title] shall take effect on January 1, 1975.

“(B) If, before the amendments made by this section [enacting this section and amending section 503 of this title] take effect, an organization described in section 401(a) of the Internal Revenue Code of 1986 [formerly I.R.C. 1954] is denied exemption under section 501(a) of such Code by reason of section 503 of such Code, the denial of such exemption shall not apply if the disqualified person elects (in such manner and at such time as the Secretary or his delegate shall by regulations prescribe) to pay, with respect to the prohibited transaction (within the meaning of section 503(b) or (g)) which resulted in such denial of exemption, a tax in the amount and in the manner provided with respect to the tax imposed under section 4975 of such Code. An election made under this subparagraph, once made, shall be irrevocable. The Secretary of the Treasury or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph.

“(2) Section 4975 of the Internal Revenue Code of 1986 (relating to tax on prohibited transactions) shall not apply to—

“(A) a loan of money or other extension of credit between a plan and a disqualified person under a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), until June 30, 1984, if such loan or other extension of credit remains at least as favorable to the plan as an arm's-length transaction with an unrelated party would be, and if the execution of the contract, the making of the loan, or the extension of credit was not, at the time of such execution, making, or extension, a prohibited transaction (within the meaning of section 503(b) of such Code) or the corresponding provisions of prior law);

“(B) a lease of joint use of property involving the plan and a disqualified person pursuant to a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), until June 30, 1984, if such lease or joint use remains at least as favorable to the plan as an arm's-length transaction with an unrelated party would be and if the execution of the contract was not, at the time of such execution, a prohibited transaction (within the meaning of section 503(b) of such Code) or the corresponding provisions of prior law;

“(C) the sale, exchange, or other disposition of property described in subparagraph (B) between a plan and a disqualified person before June 30, 1984, if—

“(i) in the case of a sale, exchange, or other disposition of the property by the plan to the disqualified person, the plan receives an amount which is not less than the fair market value of the property at the time of such disposition; and

“(ii) in the case of the acquisition of the property by the plan, the plan pays an amount which is not in excess of the fair market value of the property at the time of such acquisition:

“(D) Until June 30, 1977, the provision of services to which subparagraphs (A), (B), and (C) do not apply between a plan and a disqualified person (i) under a binding contract in effect on July 1, 1974 (or pursuant to renewals of such contract), or (ii) if the disqualified person ordinarily and customarily furnished such services on June 30, 1974, if such provision of services remains at least as favorable to the plan as an arm's-length transaction with an unrelated party would be and if the provision of services was not, at the time of such provision, a prohibited transaction (within the meaning of section 503(b) of such Code) or the corresponding provisions of prior law; or

“(E) the sale, exchange, or other disposition of property which is owned by a plan on June 30, 1974, and all times thereafter, to a disqualified person, if such plan is required to dispose of such property in order to comply with the provisions of section 407(a)(2)(A) (relating to the prohibition against holding excess employer securities and employer real property) of the Employee Retirement Income Security Act of 1974 [29 U.S.C. 1107(a)(2)] and if the plan receives not less than adequate consideration.

For the purposes of this paragraph, the term ‘disqualified person’ has the meaning provided by section 4975(e)(2) of the Internal Revenue Code of 1986.”

Regulations

Secretary of the Treasury or his delegate to issue before Feb. 1, 1988, final regulations to carry out amendments made by section 1114 of Pub. L. 99–514, see section 1141 of Pub. L. 99–514, set out as a note under section 401 of this title.

Plan Amendments Not Required Until January 1, 1998

For provisions directing that if any amendments made by subtitle D [§§1401–1465] of title I of Pub. L. 104–188 require an amendment to any plan or annuity contract, such amendment shall not be required to be made before the first day of the first plan year beginning on or after Jan. 1, 1998, see section 1465 of Pub. L. 104–188, set out as a note under section 401 of this title.

Plan Amendments Not Required Until January 1, 1989

For provisions directing that if any amendments made by subtitle A or subtitle C of title XI [§§1101–1147 and 1171–1177] or title XVIII [§§1800–1899A] of Pub. L. 99–514 require an amendment to any plan, such plan amendment shall not be required to be made before the first plan year beginning on or after Jan. 1, 1989, see section 1140 of Pub. L. 99–514, as amended, set out as a note under section 401 of this title.

Intent of Congress Concerning Employee Stock Ownership Plans

Section 803(h) of Pub. L. 94–455 provided that: “The Congress, in a series of laws (the Regional Rail Reorganization Act of 1973, the Employee Retirement Income Security Act of 1974, the Trade Act of 1974, and the Tax Reduction Act of 1975) and this Act has made clear its interest in encouraging employee stock ownership plans as a bold and innovative method of strengthening the free private enterprise system which will solve the dual problems of securing capital funds for necessary capital growth and of bringing about stock ownership by all corporate employees. The Congress is deeply concerned that the objectives sought by this series of laws will be made unattainable by regulations and rulings which treat employee stock ownership plans as conventional retirement plans, which reduce the freedom of the employee trusts and employers to take the necessary steps to implement the plans, and which otherwise block the establishment and success of these plans. Because of the special purposes for which employee stock ownership plans are established, it is consistent with the intent of Congress to permit these plans (whether structured as pension, stock bonus, or profit-sharing plans) to distribute income on employer securities currently.”

I.R.C. § 4975 — Tax on prohibited transactions · USC 2001 ed., current through 2002-01-22 · https://pensionresource.website/EAMain?content=EAMain.Law&id=irc-4975&asof=2002-07-02 · printed Oct 16, 2026
On this page
  • (a) Initial taxes on disqualified person
  • (b) Additional taxes on disqualified person
  • (c) Prohibited transaction
  • (d) Exemptions
  • (e) Definitions
  • (f) Other definitions and special rules
  • (g) Application of section
  • (h) Notification of Secretary of Labor
  • (i) Cross reference
Parallel provisions
Cited by (code & regs)
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Revenue Procedures
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  • Rev. Proc. 2013-6 Jan 2, 2013 — Employee plans determination letters. Revised procedures are provided for issuing determination letters on the qualified status of employee plans under section… (b)(1)(iii)(e)(7)
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Notices
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Announcements
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Revenue Rulings
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Also cited in 76 other documents
Department of Labor (EBSA)
Technical Releases
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  • 90 FR 4192 Jan 15, 2025 — Voluntary Fiduciary Correction Program (a)(f)(5)
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  • 77 FR 5632 Feb 3, 2012 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (a)(d)(2)(e)(1)
  • 75 FR 41600 Jul 16, 2010 — Reasonable Contract or Arrangement Under Section 408(b)(2)-Fee Disclosure (d)(2)
  • 75 FR 2068 Jan 14, 2010 — Definition of “Plan Assets”-Participant Contributions
Proposed Rules
  • 88 FR 80648Proposed Nov 20, 2023 — Hearing on Retirement Security Rule: Definition of an Investment Advice Fiduciary and Associated Prohibited Transaction Exemption Amendments Comments due Nov 29, 2023
  • 88 FR 75890Proposed Nov 3, 2023 — Retirement Security Rule: Definition of an Investment Advice Fiduciary Comments due Jan 2, 2024 (a)(c)(c)(1)(c)(1)(ii)(A)(c)(2)(d)(17)
  • 88 FR 9408Proposed Feb 14, 2023 — Amendment and Restatement of Voluntary Fiduciary Correction Program Comments due Nov 21, 2022
  • 87 FR 71164Proposed Nov 21, 2022 — Voluntary Fiduciary Correction Program Comments due Jan 20, 2023 (f)(5)
  • 87 FR 56912Proposed Sep 16, 2022 — Initial Regulatory Flexibility Analysis for Proposed Amendment to Prohibited Transaction Class Exemption 84-14 (the QPAM Exemption) Comments due Oct 11, 2022 (c)(2)
  • 84 FR 37545Proposed Jul 31, 2019 — "Open MEPs" and Other Issues Under Section 3(5) of the Employee Retirement Income Security Act Comments due Oct 29, 2019 (c)
  • 82 FR 31278Proposed Jul 6, 2017 — Request for Information Regarding the Fiduciary Rule and Prohibited Transaction Exemptions Comments due Aug 7, 2017 (c)(1)(e)(3)(B)
  • 82 FR 12319Proposed Mar 2, 2017 — Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice; Best Interest Contract Exemption (Prohibited Transaction Exemption … Comments due Mar 17, 2017 (c)(1)(e)(3)(B)
  • 81 FR 47534Proposed Jul 21, 2016 — Proposed Revision of Annual Information Return/Reports Comments due Oct 4, 2016 (b)(8)(c)(d)(3)(e)(2)
  • 80 FR 72006Proposed Nov 18, 2015 — Savings Arrangements Established by States for Non-Governmental Employees Comments due Jan 19, 2016
  • 80 FR 34869Proposed Jun 18, 2015 — Hearing on Definition of the Term “Fiduciary”; Conflict of Interest Rule-Retirement Investment Advice and Related Proposed Prohibited Transaction Exemptions Comments due Jul 21, 2015
  • 77 FR 74063Proposed Dec 12, 2012 — Amendments to the Abandoned Plan Regulations Comments due Feb 11, 2013 (c)(2)
IRS / Treasury
Revenue Procedures
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  • Rev. Proc. 2019-4 Jan 2, 2019 — This procedure contains revised procedures for determination letters and letter rulings issued by the Commissioner, Tax Exempt Agreements Office. Rev. Proc. 20… (e)(e)(7)
  • Rev. Proc. 2018-4 Jan 2, 2018 — This procedure contains revised procedures for determination letters and letter rulings issued by the Commissioner, Tax Exempt and Government Entities Division… (e)(e)(7)
  • Rev. Proc. 2017-4 Jan 3, 2017 — This procedure contains consolidated and revised procedures for determination letters and letter rulings issued by the Commissioner, Tax Exempt and Government … (e)(7)
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  • Rev. Proc. 2013-8Modified Jan 2, 2013 — User fees for employee plans and exempt organizations. Current guidance for complying with the user fee program of the Service as it pertains to requests for l… (c)(2)(e)
    Modified by Rev. Proc. 2013-22
  • Rev. Proc. 2011-44 Sep 26, 2011 — This procedure supplements the procedures for requesting a letter ruling under section 414(e) of the Code relating to church plans. This procedure requires tha…
Notices
  • Notice 2024-77 Nov 4, 2024 — Guidance Under Sections 414(aa) and 402(c)(12) of the Internal Revenue Code with Respect to Inadvertent Benefit Overpayments (e)(2)
  • Notice 2024-2Modified Jan 8, 2024 — Miscellaneous Changes Under the SECURE 2.0 Act of 2022 (d)
    Modified by Notice 2026-33
  • Notice 2023-27 Apr 10, 2023 — The notice announces that the Treasury Department and the IRS intend to issue guidance related to the treatment of certain nonfungible tokens (NFTs) as section… (e)(2)
  • Notice 2009-98 Dec 28, 2009 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2007-44, 2007-2 C.B. 54, pertaining to the… (f)
  • Notice 2008-108 Dec 15, 2008 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2007-44, 2007-2 C.B. 54, pertaining to the… (f)
  • Notice 2007-94 Dec 17, 2007 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2007-44, 2007-28 I.R.B. 54, pertaining to … (f)
  • Notice 2007-7Modified Jan 29, 2007 — Distribution issues; multiple issues; Pension Protection Act of 2006. This notice provides guidance in the form of questions and answers with respect to certai… (d)(d)(9)
    Modified by Notice 2009-82; Modified by Notice 2007-99
  • Notice 2007-3Modified Jan 8, 2007 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2005-66, 2005-2 C.B. 509, pertaining to th… (f)
    Modified by Notice 2007-69
  • Notice 2005-101 Dec 27, 2005 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Rev. Proc. 2005-66 pertaining to the statutory, regul… (f)
  • Notice 2004-84Modified Dec 27, 2004 — Retirement plans; qualification, list of changes. This notice sets forth a list of changes referred to in Announcement 2004-71, 2004-40 I.R.B. 569, pertaining …
    Modified by Notice 2005-95
  • Notice 2004-8 Jan 26, 2004 — Roth IRAs; abuses; listed transactions. This notice describes certain transactions that are being entered into by individuals, their Roth IRAs, and their busin… (c)(1)(C)(e)(2)
Final Rules
Proposed Rules
  • 89 FR 20569Proposed Mar 25, 2024 — Charitable Remainder Annuity Trust Listed Transaction Comments due May 24, 2024 (e)(7)
  • 87 FR 10504Proposed Feb 24, 2022 — Required Minimum Distributions Comments due May 25, 2022 (e)(7)
  • 85 FR 23172Proposed Apr 24, 2020 — Unrelated Business Taxable Income Separately Computed for Each Trade or Business Comments due Jun 23, 2020 (e)(7)
  • REG-136701-07Proposed Mar 17, 2008 — Proposed regulations under section 401 of the Code provide guidance relating to diversification requirements for certain defined contribution plans and to publ… (b)(1)(iv)(e)(7)
  • REG-133578-05Proposed Sep 26, 2005 — Proposed regulations under section 162(k) of the Code provide guidance concerning which corporation is entitled to the deduction for applicable dividends under… (e)(7)(e)(8)
  • REG-130241-04Proposed Jul 5, 2005 — Proposed regulations under section 415 of the Code contain proposed amendments to regulations regarding limitation on benefits and contributions under qualifie… (b)(c)(1)(e)(7)
  • REG-108639-99Proposed Sep 2, 2003 — Proposed regulations under sections 401(k) and 401(m) of the Code provide guidance on the requirements for certain retirement plans containing cash or deferred… (e)(e)(7)
Treasury Decisions
  • T.D. 9732 Sep 28, 2015 — These final regulations provide guidance on the determination of minimum required contributions for single-employer defined benefit pension plans and also cont…
  • T.D. 9694 Oct 6, 2014 — These final regulations provide guidance on the application of § 162(m)(6). Section 162(m)(6) limits the allowable deduction for remuneration for services prov…
  • T.D. 9319 Apr 30, 2007 — Final regulations contain amendments to the regulations under section 415 of the Code regarding limitation on benefits and contributions under qualified plans.… (b)(c)(1)(e)(7)
  • T.D. 9302 Jan 29, 2007 — Final regulations under section 409(p) of the Code provide guidance concerning requirements for employee stock ownership plans (ESOPs) holding stock of Subchap… (a)(5)(b)(9)(c)(d)(13)(d)(3)(d)(5)
  • T.D. 9282 Sep 25, 2006 — Final regulations under sections 162(k) and 404(k) of the Code provide that a payment in redemption of employer securities held by an employee stock ownership … (e)(7)
Announcements
  • Ann. 2011-78 Dec 19, 2011 — This announcement describes rules that the Treasury Department and the IRS are considering proposing relating to the determination of whether a plan is a gover… (g)(2)
  • Ann. 2011-79 Dec 19, 2011 — This announcement describes rules that the Treasury Department and the IRS are considering proposing relating to the determination of whether a plan of an Indi… (g)(2)
Revenue Rulings
  • Rev. Rul. 2005-60 Sep 12, 2005 — Minimum cost requirement; deductibility; section 101 of Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA). This ruling holds that the…
  • Rev. Rul. 2004-21 Mar 8, 2004 — Nondiscrimination; section 412(i) plan. This ruling provides an example where a plan that is funded, in whole or in part, with life insurance contracts may not…
  • Rev. Rul. 2004-4 Feb 9, 2004 — Employee stock ownership plans; S corporations; listed transactions. A finding of synthetic equity owned by a disqualified person in a nonallocation year of an… (e)(7)
  • Rev. Rul. 2003-88 Aug 11, 2003 — Section 4971; running of statute of limitations; and filing of form. This ruling states that the filing of a Form 5330, and not the filing of a Form 5500, star…
Tax Court (64) · DOL/Federal (2)
U.S. Tax Court (64)
Rulings that address this provision
Also cite this provision (30)
DOL and federal courts (2)
Rulings that address this provision
Also cite this provision (1)
Private Letter Rulings (26)
Private Letter Rulings (26)
Rulings primarily about this provision
Also cite this provision (10)

Each row is a version of the text as published by the official source. Code dates are the edition/release point that first reflected the change; regulation dates are eCFR effective dates. The library checks the official sources automatically, so new versions appear here on their own; “run” opens the sync that recorded a version.

EffectiveThroughSourceAmended by
Jan 4, 1995Jan 5, 1997USC 1994 ed., current through 1995-01-04 run 49Pub. L. 101-508View
Jan 6, 1997Jan 25, 1998USC 1996 ed., current through 1997-01-06 run 58Pub. L. 104-191View · Redline (sign in)
Jan 26, 1998Jan 4, 1999USC 1997 ed., current through 1998-01-26 run 63Pub. L. 105-34View · Redline (sign in)
Jan 5, 1999Jan 1, 2001USC 1998 ed., current through 1999-01-05 run 67Pub. L. 105-206View · Redline (sign in)
Jan 2, 2001Jan 21, 2002USC 2000 ed., current through 2001-01-02 run 75Pub. L. 106-554View · Redline (sign in)
Jan 22, 2002Jan 18, 2004USC 2001 ed., current through 2002-01-22 run 79Pub. L. 107-22View · Redline (sign in)
Jan 19, 2004Jan 1, 2006USC 2003 ed., current through 2004-01-19 run 87Pub. L. 108-173View · Redline (sign in)
Jan 2, 2006Jan 2, 2007USC 2005 ed., current through 2006-01-02 run 95Pub. L. 109-135View · Redline (sign in)
Jan 3, 2007Jan 4, 2009USC 2006 ed., current through 2007-01-03 run 99Pub. L. 109-280View · Redline (sign in)
Jan 5, 2009Jan 11, 2018USC 2013 ed., current through 2014-01-16 run 13Pub. L. 110-458View · Redline (sign in)
Jan 12, 2018Jan 13, 2019USC 2017 ed., current through 2018-01-12 run 17Pub. L. 110-458View · Redline (sign in)
Jan 14, 2019Jan 23, 2020USC 2018 ed., current through 2019-01-14 run 18Pub. L. 115-141View · Redline (sign in)
Jan 24, 2020Jan 4, 2023USC 2019 ed., current through 2020-01-24 run 19Pub. L. 116-94View · Redline (sign in)
Jan 5, 2023Jan 2, 2024USC 2022 ed., current through 2023-01-05 run 22Pub. L. 117-328View · Redline (sign in)
Jan 3, 2024currentUSC 2024 ed., current through 2025-01-06 run 1Pub. L. 117-328View · Redline (sign in)
Provision-level history (blame)