Can the excise tax under 4971(a) (10%) be waived?

[katieinny]

I can find references to making application to have the 4971(b) (100%) excise tax waived for an underfunded pension plan, but I don't see anything about applying to have the 4971(a) (10%) excise tax waived. Isn't that tax able to be waived?

[Guest Texas_Acty]

The general consensus that I seem to recall from other boards, and in some earlier threads here I believe, is that IRS does not have the statutory authority/discretion to waive the 10% as it does for the 100%

[david rigby]

I agree with Texas_Acty.

[katieinny]

I was pretty well convinced that the 10% penalty couldn't be waived either, but I kept reading under IRC 4971 and finally came to Section (f)(4). So even though the Rev Proc doesn't address it, we're going to try under this Section.

[Guest Texas_Acty]

I was pretty well convinced that the 10% penalty couldn't be waived either, but I kept reading under IRC 4971 and finally came to Section (f)(4). So even though the Rev Proc doesn't address it, we're going to try under this Section.

Good luck. Let us know if you succeed.

[Kirk Maldonado]

ERISA Section 3002(b) provides in part as follows:

The Secretary of the Treasury may waive the imposition of the tax imposed under section 4971(b) of such Code in appropriate cases.

IRS Revenue Procedue 81-44 deals with the waiver of the 100% penalty of section 4971(b), but there is no mention of waiving the 10% penalty of section 4971(a).

If you are going to pursue a waiver, my recommendation is that you get your fee paid upfront.