After an employer/participant (this is a one person sole proprietorship plan) has received a reversion of excess assets from a defined benefit plan, and has paid the IRS the 50% excise penalty on the reversion,....how is this reversion handled for the individual on his 1040? Does the individual pay taxes on the entire reversion, or on only the part that has not already been sent to the IRS in the form of the 50% excise penalty?

So sorry, but taxes are due on the total amount of reversion prior to payment of the excise tax (remember, excise taxes are never deductible so this makes sense). So if you had a $100,000 reversion, you would have a $50,000 excise tax, and additional income for personal taxes of the full $100,000. This is the reason that you see so many "creative" schemes developed to deal with the overfunded DB plan (w/ respect to 415 limits).