IRC Sec. 414(b)

This subsection was not affected by recent pension reform legislation (EGTRRA). However, this subsection should be required reading for the tax advisors of any business owner that has an ownership interest in more than one business. This subsection outlines the circumstances in which two or more businesses will constitute a "controlled group" thereby generally requiring that all businesses in the controlled group be treated as one business for purposes of applying the rules governing qualified retirement plans.

IRC Sec. 414(b)

(b) Employees of controlled group of corporations
For purposes of sections 401, 408(k), 408(p), 410, 411, 415, and 416, all employees of all corporations which are members of a controlled group of corporations (within the meaning of section 1563(a), determined without regard to section 1563(a)(4) and (e)(3)(C)) shall be treated as employed by a single employer. With respect to a plan adopted by more than one such corporation, the applicable limitations provided by section 404(a) shall be determined as if all such employers were a single employer, and allocated to each employer in accordance with regulations prescribed by the Secretary.

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