Excise tax on 401k contributions with an active DB plan?

[David MacLennan]

Generally, if you have an active DB plan and a DC plan the DC contributions are not deductible because of the 404(a)(7) 25% deduction limit. The non-deductible contributions are generally subject to an excise tax.

Under 4972©(6)(B), there is an exception to the excise tax for elective and matching 401(k) contributions, but the statute clearly states it applies only to plans with more than 100 participants. However, after pointing this out to a client with a small plan in this situation, I was told by the plan attorney that the excise tax doesn't apply. The attorney's position is that the intent of the 1997 law change that added this exception was to apply it to all plans, not just those with more than 100 participants, and he cites the legislative committee reports and Publication 560 which do not mention the 100 participant requirement. Who is right here? Does anyone know of any other citations from IRS material, or statements from IRS officials that confirm or deny?