(Emphasis added.) See also James H. Gordon, 1956, 26 T.C. 763, Clarence H. Buckley, 1957, 29 T.C. 455, and McGowan v. United States, E.D. Wis. 1959, 175 F. Supp. 364, affirmed 7 Cir. 1960, 277 F.2d 613, which distinguish between distributions on separation from service and distributions on mere termination of the plan. Mary Miller, 1954, 22 T.C. 293, affirmed per curiam 6 Cir. 1955, 226 F.2d 618, marks a significant development in the tax treatment of lump-sum payments from employees' trusts.

The Tax Court and several district courts have permitted the double penalties on the theory that they are in accord with Congressional intent, and in harmony with Treasury Regulation 111, § 29.294-1(b)(3)(i), 26 C.F.R. (1949 ed.), which states that in the event of failure to file a declaration, the estimated tax shall be considered zero. G.E. Fuller, 1953, 20 T.C. 308; Clarence F. Buckley, 1957, 29 T.C. 455; Marcel Garsaud, 1957, 28 T.C. 1086; Walter H. Kaltreider, 1957, 28 T.C. 121; Palmisano v. United States, D.C.E.D.La. 1958, 159 F. Supp. 98; Farrow v. United States, D.C. S.D.Cal. 1957, 150 F. Supp. 581; Peterson v. United States, D.C.S.D.Texas 1956, 141 F. Supp. 382. Our own court has affirmed the Tax Court's imposition of the double additions in two recent cases, although the point was not specifically argued.

Section 165(a) Internal Revenue Code of 1939, as amended. Glinske v. Commissioner, 17 T.C. 562; McGowan v. United States, 7 Cir., 277 F.2d 613; Buckley v. Commissioner, 29 T.C. 455. 4.

Adoption of a profit-sharing plan by a transferee corporation has been a stated ground for disqualification under sec. 402(a)(2) only where the distribution was made subsequent to the transfer of assets and could not be said to ‘relate back’ to the transfer. See and compare Jack E. Schlegel, 46 T.C. 706 (1966); E. N. Funkhouser, 44 T.C. 178 (1965); Rybacki v. Conley, 340 F.2d 944 (C.A. 2, 1965); Clarence F. Buckley, 29 T.C. 455 (1957). The Fifth Circuit Court of Appeals recognized that the taxpayer was on the payroll of the subsidiary corporation prior to the transfer of stock ownership, but, because of its approach, found it unnecessary to question the District Court's finding that the taxpayer was an employee of the parent corporation prior to the transfer.

A transfer of the entire beneficial ownership of a business in and of itself is insufficient if the old employer continues as a separate entity and the employee continues in its service. United States v. Martin, 337 F.2d 171 (C.A. 8, 1964); United States v. Johnson, 331 F.2d 943 (C.A. 5, 1964), fn. 4; Nelson v. United States, 222 F.Supp. 712 (D. Idaho 1963); McGowan v. United States, 175 F.Supp. 364 (E.D. Wisc. 1959), affd, 277 F.2d 613 (C.A. 7, 1960); William S. Bolden, 39 T.C. 829 (1963); Estate of Edward I. Rieben, 32 T.C. 1205 (1959); Clarence F. Buckley, 29 T.C. 455 (1957). Where, however, there is a change of employer accompanied by such a transfer of beneficial ownership,

Ruberoid was thus petitioner's employer in respect of that pension trust, and since he continued in its employ for at least some 2 years after the 1959 distributions in issue, these payments do not qualify as having been made on account of his ‘separation from the service’ of his employer. Rybacki v. Conley, 340 F.2d 944 (C.A. 2); Edward Joseph Glinske, 17 T.C. 562; Clarence F. Buckley, 29 T.C. 455. See also Thomas E. Judkins, 31 T.C. 1022, 1030.

We think our conclusion on the facts in this case is consistent with the Miller and Martin cases and the interpretation of the law was made by the Internal Revenue Service in the revenue rulings above mentioned. Other cases cited by respondent and decided by this Court are distinguishable on the facts. In Edward Joseph Glimske, Jr., 17 T.C. 562, and in Clarence F. Buckley, 29 T.C. 455, the acquiring corporation assumed the employer's obligations under the plan and continued the plan for some time after acquisition of the assets, and the petitioner remained in the employment of the acquiring corporation, so the petitioner's rights did not become fixed because of the change in ownership of the assets. In Estate of Frank B. Fry, 19 T.C. 461, affd. 205 F.2d 517, the petitioner continued in the employment of the same employer for 2 years after he became entitled to and received his lump-sum distribution.