Am I correct in my understanding that the excise taxes under Code Section 4975 do not apply to a 403(b) plan?

A 403(b) plan is not among the types of arrangements specifically listed as a "plan" under 4975(e)(1). It is also not listed in the instructions to Form 5330 as a plan subject to Code Section 4975. The Internal Revenue Manual also does not list a 403(b) plan as being subject to 4975. However, I have been unable to find anything that affirmatively states that 4975 does not apply to a 403(b) plan.

My specific issue is whether the excise tax applies for late remittance of participant contributions to an ERISA-covered 403(b) plan. Certainly, the ERISA penalties (20% under ERISA 502(l) and 5% under ERISA 502(i)) could apply, but it looks like the Code Section 4975 excise tax does not.

Any thoughts?

Thanks.

Why isnt the express language of 4975(e)(1) sufficient to affirmatively exclude 403b plans since a 403b plan is not a qualified plan, an IRA or any of the types of health IRAs listed?

It probably is sufficient. However, I had never picked up on the exclusion of 403(b) plans from the excise tax provisions of 4975 before and want to be sure that I am not missing anything. From the research I've done, it certainly looks like 4975 does not apply. I won't try to guess the policy reason for excluding 403(b)'s from coverage.

Thanks for the reply.

In the original message, you noted that it was an ERISA covered 403(b) plan. In that case, there is a parallel provision for the excise tax in ERISA Section 502(i). This section has not been amended over the years, so it remains at the original 5 percent penalty level.