26 U.S.C. § 4979A
If-
there is hereby imposed a tax on such allocation or ownership equal to 50 percent of the amount involved.
For purposes of this section, the term "prohibited allocation" means-
The tax imposed by this section shall be paid-
which made the written statement described in section 664(g)(1)(E) or in section 1042(b)(3)(B) (as the case may be), and
The statutory period for the assessment of any tax imposed by this section on an allocation described in subsection (a)(2) of qualified employer securities shall not expire before the date which is 3 years from the later of-
For purposes of this section-
Except as provided in paragraph (2), terms used in this section have the same respective meanings as when used in sections 409 and 4978.
The amount involved with respect to any tax imposed by reason of subsection (a)(3) is the amount allocated to the account of any person in violation of section 409(p)(1).
The amount involved with respect to any tax imposed by reason of subsection (a)(4) is the value of the shares on which the synthetic equity is based.
For purposes of subparagraph (A), the amount involved for the first nonallocation year of any employee stock ownership plan shall be determined by taking into account the total value of all the deemed-owned shares of all disqualified persons with respect to such plan.
The statutory period for the assessment of any tax imposed by this section by reason of paragraph (3) or (4) of subsection (a) shall not expire before the date which is 3 years from the later of-
26 U.S.C. § 4979A
EDITORIAL NOTES
AMENDMENTS2001-Subsec. (a). Pub. L. 107-16, §656(c)(1), added pars. (3) and (4) and, in concluding provisions, substituted "there is hereby imposed a tax on such allocation or ownership equal to 50 percent of the amount involved." for "there is hereby imposed a tax on such allocation equal to 50 percent of the amount involved."Subsec. (c). Pub. L. 107-16, §656(c)(2), amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: "The tax imposed by this section shall be paid by-"(1) the employer sponsoring such plan, or "(2) the eligible worker-owned cooperative,which made the written statement described in section 664(g)(1)(E) or in section 1042(b)(3)(B) (as the case may be)."Subsec. (e). Pub. L. 107-16, §656(c)(3), amended heading and text of subsec. (e) generally. Prior to amendment, text read as follows: "Terms used in this section have the same respective meaning as when used in section 4978." 1997-Subsec. (a). Pub. L. 105-34, §1530(c) (15), amended heading and text of subsec. (a) generally. Prior to amendment, text read as follows: "If there is a prohibited allocation of qualified securities by any employee stock ownership plan or eligible worker-owned cooperative, there is hereby imposed a tax on such allocation equal to 50 percent of the amount involved."Subsec. (c). Pub. L. 105-34, §1530(c) (16), amended heading and text of subsec. (c) generally. Prior to amendment, text read as follows: "The tax imposed by this section shall be paid by-"(1) the employer sponsoring such plan, or "(2) the eligible worker-owned cooperative,which made the written statement described in section 1042(b)(3)(B)." Subsecs. (d), (e). Pub. L. 105-34, §1530(c) (17), added subsec. (d) and redesignated former subsec. (d) as (e). 1996-Subsec. (c). Pub. L. 104-188 amended directory language of Pub. L. 101-239, §7304(a)(2)(D) (ii). See 1989 Amendment note below.1989-Subsec. (b)(1). Pub. L. 101-239, §7304(a)(2)(D)(i), struck out "or section 2057" after "section 1042".Subsec. (c). Pub. L. 101-239, §7304(a)(2)(D) (ii), as amended by Pub. L. 104-188, struck out "or section 2057(d)" after "section 1042(b)(3)(B)" in concluding provisions. 1986-Subsec. (b)(1). Pub. L. 99-514, §1172(b)(2)(A), inserted reference to section 2057.Subsec. (c). Pub. L. 99-514, §1172(b)(2)(B), inserted reference to section 2057(d).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2001 AMENDMENT Amendment by 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.
EFFECTIVE DATE OF 1997 AMENDMENTAmendment by 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.
EFFECTIVE DATE OF 1989 AMENDMENTAmendment by Pub. L. 101-239 applicable to estates of decedents dying after Dec. 19, 1989, see section 7304(a)(3) of Pub. L. 101-239, set out as a note under section 409 of this title.
EFFECTIVE DATE OF 1986 AMENDMENT Amendment by section 1172(b)(2) of Pub. L. 99-514 applicable to sales after Oct. 22, 1986, with respect to which election is made by executor of an estate who is required to file the return of the tax imposed by this title on a date (including extensions) after Oct. 22, 1986, see section 1172(c) of Pub. L. 99-514, set out as a note under section 409 of this title.
EFFECTIVE DATEPub. L. 99-514, title XVIII, §1854(a)(9)(D), Oct. 22, 1986, 100 Stat. 2878, provided that: "The amendments made by this paragraph [enacting this section and amending section 1042 of this title] shall apply to sales of securities after the date of the enactment of this Act [Oct. 22, 1986]."
PLAN AMENDMENTS NOT REQUIRED UNTIL JANUARY 1, 1989For 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.
- Secretary
- The term "Secretary" means the Secretary of the Treasury or his delegate.
- corporation
- The term "corporation" includes associations, joint-stock companies, and insurance companies.
- person
- The term "person" shall be construed to mean and include an individual, a trust, estate, partnership, association, company or corporation.
- stock
- The term "stock" includes shares in an association, joint-stock company, or insurance company.