Rev. Rul. 67-3

In one year a sole proprietor established and contributed to a qualified profit-sharing plan which covered only the self-employed individual. In January of the next year the individual took in a partner and thereafter the business was conducted as a partnership. He also made a contribution to the plan in this second year. The partnership, however, did not adopt the plan or establish a new plan. Under the provisions of section 1.401-10(e)(1) of the Income Tax Regulations, the partnership is considered to be the employer of each of the partners for purposes of section 401 of the Internal Revenue Code of 1954, as amended by the Self-Employed Individuals Tax Retirements Act of 1962, Public Law 87-792, C.B. 1962-3, 89, and an individual partner is not an employer who may establish and maintain a qualified plan with respect to his services performed with the partnership. Held , the individual may not take deductions for contributions to his former plan with respect to earned income derived from the partnership.