Rev. Rul. 68-300

The purpose of this Revenue Ruling is to update and restate under the current statute and regulations the position set forth in PS No. 4, dated July 29, 1944, relative to the interpretation of the term "officer" as applied to an assistant secretary-treasurer under the circumstances stated below.

An employee in the parts department of a company was given the title of assistant secretary-treasurer to qualify him to sign checks, in the absence of superior officers of the corporation, and to affix and attest to the corporate seal when necessary. The employee executed documents in his official capacity on a few occasions but otherwise had no voice in the management or administration of the corporation.

In order to meet the coverage requirements of section 401(a)(3)(B) of the Internal Revenue Code of 1954 a plan must not discriminate in favor of employees who are officers, shareholders, supervisors, or highly compensated. Further, section 401(a)(4) of the Code requires that contributions or benefits provided under a qualified plan must not discriminate in favor of such employees.

The status of officers should be determined upon the basis of all the facts including, for example, the source of their authority, the term for which elected or appointed, and the nature and extent of their duties. As generally accepted in connection with corporations, the term "officer" means an administrative executive who is in regular and continued service. It implies continuity of service and excludes those employed for a special and single transaction.

The facts in this case indicate that the employee's administrative duties are nominal and are exercised in a substitute capacity on some occasions. Accordingly, he is not considered an officer within the purview of section 401(a)(3)(B) and (4) of the Code. However, such an employee, although not included in the officer group, may be a supervisory or highly compensated employee.

PS No. 4 is hereby superseded, since the position set forth therein is incorporated in this Revenue Ruling.

¹ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.