Page:United States Statutes at Large Volume 92 Part 3.djvu/151

 PUBLIC LAW 95-600—NOV. 6, 1978

92 STAT. 2783

457(d) of the Internal Revenue Code of 1954) and not an organization which is exempt from tax under section 501 of such Code, and (B) under which the payment or otherwise making available of compensation is deferred. (2) CERTAIN PLANS EXCLUDED.—Paragraph (1) shall not apply to— (A) a plan described in section 401(a) of the Internal Revenue Code of 1954 which includes a trust exempt from tax under section 501(a) of such Code, (B) an annuity plan or contract described in section 403 of such Code, (C) a qualified bond purchase plan described in section 405(a) of such Code, (D) that portion of any plan which consists of a transfer of property described in section 83 (determined without regard to subsection (e) thereof) of such Code, and (E) that portion of any plan which consists of a trust to which section 4O20b) of such Code applies. (c) EFFECTIVE DATE.—This section shall apply to taxable years ending on or after February 1, 1978. SEC. 133. CLARIFICATION OF DEDUCTIBILITY OF PAYMENTS OF DEFERRED COMPENSATION, ETC., TO INDEPENDENT CONTRACTORS. (a) IN GENERAL.—Section 404 (relating to deduction for contributions of an employer to an employees' trust or annuity plan and compensation under a deferred-payment plan) is amended by inserting after subsection (c) the following new subsection:

^^te, p. 2779. ^6 USC 501.

26 USC 401. 26 USC 501. 26 USC 403. 26 USC 405. 26 USC 83. 26 USC 402.

26 USC 404.

"(d) DEDUCTIBILITY OF PAYMENTS OF DEFERRED COMPENSATION, ETC., TO INDEPENDENT CONTRACTORS.—If a plan would be described in so

much of subsection (a) as precedes paragraph (1) thereof (as modified by subsection (b)) but for the fact that there is no employer-employee relationship, the contributions or compensation— "(1) shall not be deductible by the payor thereof under section 162 or 212, but "(2) shall (if they would be deductible under section 162 or 212 but for paragraph (1)) be deductible under this subsection for the taxable year in which an amount attributable to the contribution or compensation is includible in the gross income of the persons participating in the plan." (b) CLARIFICATION OF SECTION 404(b).—-Subsection (b) of section 404 (relating to method of contributions, etc., having the effect of a plan) is amended by striking out "similar plan" and inserting in lieu thereof "other plan". (c) EFFECTIVE DATE.—The amendments made by this section shall apply to deductions for taxable years beginning after December 31, 1978. SEC. 134. TAX TREATMENT OF CAFETERIA PLANS. (a) IN GENERAL.—Part III of subchapter B of chapter 1 (relating to items specifically excluded from gross income) is amended by redesignating section 125 as section 126 and by inserting after section 124 the following new section: "SEC. 125. CAFETERIA PLANS. "(a) IN GENERAL.—Except as provided in subsection (b), no amount shall be included in the gross income of a participant in a cafeteria

26 USC 162, 212.

26 USC 404.

26 USC 404 "ote.

26 USC 126. 26 USC 125.

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