Does a Professional Service Employer Need to Have a Calendar Year-End?

[Guest EMM118]

I recall that someone once told me that a professional service employer was required to have a 12/31 year-end. However, I do not believe that is the case. If a small law firm (10 attorneys) with a 3/31 year-end maintains a DB plan, I believe the DB plan is exempt from PBGC coverage. Any thoughts?

Thanks in advance. Ed

[Lame Duck]

I am going back into the dim dark recesses of my mind for this, so I won't makes claims as to the accuracy of it. At one point in time, professional service corporations could be established using any fiscal year end. Sometime in the mid 80s(?) the IRS began to require all new professional service corporations to use a 12/31 fiscal year end, unless they could show subsatantial need for a different year, such as cash flow.

The PBGC does not set requirements as to the fiscal year for a professional service organization. Any organization that meets the PBGC definition of a professional service employer should be exempt from PBGC coverage, regarless of the fiscal year of the organization.

[E as in ERISA]

I thought it was about the 86 act? The calendar year rule applied to partnerships, S-Corps, personal service corpoarations unless they could establish a business purpose for a fiscal year. Bank trust departments got all their trust returns changed to calendar years, too?