I.R.C. § 4977(a) Imposition Of Tax
In the case of an employer to whom an election under this section applies for any
calendar year, there is hereby imposed a tax for such calendar year equal to 30 percent
of the excess fringe benefits.
I.R.C. § 4977(b) Excess Fringe Benefits
For purposes of subsection (a), the term “excess fringe benefits” means,
with respect to any calendar year—
I.R.C. § 4977(b)(1)
the aggregate value of the fringe benefits provided by the employer during the calendar
year which were not includible in gross income under paragraphs (1) and (2)
of section 132(a)
I.R.C. § 4977(c) Effect Of Election On Section 132(a)
I.R.C. § 4977(c)(1)
an election under this section is in effect with respect to an employer for any calendar
I.R.C. § 4977(c)(2)
at all times on or after January 1, 1984, and before the close of the calendar year
involved, substantially all of the employees of the employer were entitled to employee
discounts on goods or services provided by the employer in 1 line of business,
for purposes of paragraphs (1) and
(2) of section 132(a)
(but not for purposes of section section 132(h)
), all employees of any line of business of the employer which was in existence on
January 1, 1984, shall be treated as employees of the line of business referred to
in paragraph (2).
I.R.C. § 4977(d) Period Of Election
An election under this section shall apply to the calendar year for which made and
all subsequent calendar years unless revoked by the employer.
I.R.C. § 4977(e) Treatment Of Controlled Groups
All employees treated as employed by a single employer under subsection (b), (c),
or (m) of section 414
shall be treated as employed by a single employer for purposes of this section.
I.R.C. § 4977(f) Section To Apply Only To Employment Within The United States
Except as otherwise provided in regulations, this section shall apply only with
respect to employment within the United States.
(Added Pub. L. 98-369, div. A, title V, 531(e)(1), July 18, 1984, 98 Stat. 885, and amended Pub. L. 99-514, title XVIII, 1853(c)(1), (2), Oct. 22, 1986, 100 Stat. 2871; Pub. L. 103-66, title XIII, Sec. 13213(d)(3)(D), Aug. 10, 1993; 107 Stat. 312; Pub. L. 104-188,
1704, Aug. 20, 1996, 110 Stat. 1755.)
1996--Subsec. (c). Pub. L. 104-188, 1704(t)(66), substituted
“section 132(h)” for “section 132(i)(2)”.
1993—Subsec. (c). Pub. L. 103-66, Sec. 13213(d)(3)(D), amended subsec. (c) by substituting “section 132(i)(2)”
for “section 132(g)(2)”.
1986--Subsec. (c)(2). Pub. L. 99-514, 1853(c)(1), amended par.
(2) generally. Prior to amendment, par. (2) read as follows: “as of January
1, 1984, substantially all of the employees of the employer were entitled to employee
discounts or services provided by the employer in 1 line of business,”.
Subsec. (f). Pub. L. 99-514, 1853(c)(2), added subsec. (f).
EFFECTIVE DATE OF 1993 AMENDMENT
Amendment by Pub.. L. 103-66, Sec. 13213(d)(3)(D), effective for reimbursements or
other payments in respect of expenses incurred after December 31, 1993.
EFFECTIVE DATE OF 1986 AMENDMENT
Amendment by Pub. L. 99-514 effective, except as otherwise provided, as if included in the provisions of the
Tax Reform Act of 1984, Pub. L. 98-369, div. A, to which such amendment relates, see section 1881 of Pub. L. 99-514, set out as a note under section 48 of this title.
Section effective Jan. 1, 1985, see section 531(h)
of Pub. L. 98-369, set out as a note under section 132 of this title.
APPLICATION OF SUBSECTION (c) OF THIS SECTION TO AGRICULTURAL COOPERATIVES INCORPORATED
Section 1853(c)(3) of Pub. L. 99-514
provided that: “For purposes of determining whether the requirements of section
4977(c) of the Internal Revenue Code
of 1954 [now 1986] are met in the case of an agricultural cooperative incorporated
in 1964, there shall not be taken into account employees of a member of the same controlled
group as such cooperative which became a member during July 1980.”