                       T.C. Memo. 1999-275



                     UNITED STATES TAX COURT



                 FRANK A. SONIER, Petitioner v.
          COMMISSIONER OF INTERNAL REVENUE, Respondent



     Docket No. 13527-98R.                   Filed August 17, 1999.



     Frank A. Sonier, pro se.

     Lawrence H. Ackerman, for respondent.


                       MEMORANDUM OPINION

     DEAN, Special Trial Judge:   This matter is before the Court

on respondent's motion to dismiss for lack of jurisdiction.   The

issues for decision are:   (1) Whether petitioner has alleged that

there is an actual controversy; and (2) whether petitioner is an

"interested party" entitled to file a petition for declaratory
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judgment pursuant to section 7476(b)(1)1 with respect to the

continuing qualification of the Maritime Association

International Longshoremen's Retirement Plan Number 002 (MAIL

Plan).

                           Background

     Petitioner is a participant in the MAIL Plan.   Before its

approval for tax-exempt status under sections 401 and 501, on

May 21, 1997, the board of trustees for the MAIL Plan filed an

Application for Determination for Collectively Bargained Plan

with the Internal Revenue Service (IRS).   The MAIL Plan

administrator issued a letter to all contributing employers on

July 8, 1997, asking that the Notification to Interested Parties

with respect to the application filed by the MAIL Plan be posted

at the principal places of employment and where notices

concerning employee-management issues are usually posted.

Petitioner found out about the pending application from his

employer's human resources office and filed comments with the

District Director, which were sent on August 4, 1997, opposing

approval of the plan.




     1
      Unless otherwise indicated, all chapter, subchapter, and
section references are to chapters, subchapters, and sections of
the Internal Revenue Code of 1986, as in effect at the time the
petition herein was filed. All Rule references are to the Tax
Court Rules of Practice and Procedure.
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     Petitioner commented to the District Director that he was

unhappy with the plan, that he did not vote for the plan, and

that it was not in his best interest.     Petitioner did not note in

the comment that he was dissatisfied with the form of notice he

received about the pending application for determination.     The

IRS issued a favorable determination letter on May 5, 1998,

finding that the MAIL Plan satisfied the requirements for a

qualified tax-exempt retirement plan.

     Petitioner filed a pleading on August 3, 1998, which the

Court filed as a petition for declaratory judgment.     Pursuant to

the order of the Court dated October 16, 1998, petitioner filed

on November 17, 1998, a pleading which was filed by the Court as

an amended petition.   In his pleadings, petitioner requested that

the MAIL Plan be disqualified under section 401 and thus not be

exempt from tax under section 501.     Petitioner also requested

that the plan be terminated.   When the petition for declaratory

judgment was filed, the address of the board of trustees of the

MAIL Plan was in Houston, Texas.

     Respondent subsequently filed a motion to dismiss for lack

of jurisdiction on the grounds that petitioner is not an

interested party and that there is no actual controversy

involving the qualification of the plan.
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                            Discussion

     Respondent's motion to dismiss for lack of jurisdiction

makes the following arguments:    (1) There is no "actual

controversy" because petitioner fails to set forth any grounds

which, if proven, would result in plan disqualification; and (2)

petitioner does not qualify as an "interested party" because he

has not alleged or shown that he is a present employee or that he

is covered by a collective-bargaining agreement under which the

MAIL Plan is maintained.

     Section 7476(a) provides that this Court may exercise

jurisdiction over a declaratory judgment action if there is an

actual controversy involving a determination by the Secretary

with respect to the initial or continuing qualification of a

retirement plan, or involving a failure by the Secretary to make

a determination with respect to such initial qualification or

with respect to such continuing qualification if the controversy

arises from a plan amendment or plan termination.    See Loftus v.

Commissioner, 90 T.C. 845, 855 (1988), affd. without published

opinion 872 F.2d 1021 (2d Cir. 1989).    Petitioner bears the

burden of proving that the jurisdictional requirements of section

7476 have been met.   See Rule 217(c)(1)(A)(i); Halliburton Co. v.

Commissioner, 98 T.C. 88, 94 (1992).

     We shall first address whether an actual controversy exists.

As previously stated, in order for us to exercise jurisdiction
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over a declaratory judgment action under section 7476, there must

be an actual controversy involving a determination by the

Secretary with respect to the initial or continuing qualification

of a retirement plan.   See sec. 7476(a).

     In deciding whether an actual controversy exists, we look to

the standard set forth by the Supreme Court in Maryland Cas. Co.

v. Pacific Coal & Oil Co., 312 U.S. 270, 273 (1941).   The

standard is whether, under all the facts and circumstances, there

is a "substantial controversy, between parties having adverse

legal interests, of sufficient immediacy and reality to warrant

the issuance of a declaratory judgment."    Id.; see also Loftus v.

Commissioner, supra at 856.

     We have noted that an actual controversy under section 7476

generally arises from some disagreement between a petitioner and

the Commissioner as to the qualified status of the plan.     See

Halliburton Co. v. Commissioner, supra at 105; Loftus v.

Commissioner, supra at 855-859.

     We begin, therefore, by examining petitioner's arguments

with respect to the qualified status of the plan.   Petitioner

claims that the IRS should not have approved the plan because the

rate of return is unfavorable, petitioner preferred a section

401(k) plan, and the proper notice requirements were not met.      We

address his defective notice argument first.
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        In his comment to the District Director, petitioner did not

raise the issue of defective notice.     Assuming, arguendo, that in

the absence of such an argument in the administrative record we

can address petitioner's concern, we examine whether petitioner's

complaint is grounds for disqualification of the plan.    Cf.

Halliburton Co. v. Commissioner, supra; Thompson v. Commissioner,

71 T.C. 32, 37 (1978).    Petitioner alleges that he never saw any

posted notices at his place of employment and only found out

about the application pending before the IRS when he called the

human resources department to inquire about the status of the

MAIL Plan application.    Petitioner claims that the board of

trustees failed to post the requisite notice, so the plan should

never have been approved; and therefore there is a disagreement

between him and the IRS regarding the qualified status of the

plan.    Respondent, on the other hand, claims that notice was

properly given, and irrespective of petitioner's claim,

petitioner received actual notice of the pending application in

time to file a comment with the IRS.

     In general, before a determination as to the qualified

status of a retirement plan can be made, notice must be given to

all interested parties.    See secs. 1.7476-1(a) and 1.7476-2(a),

Income Tax Regs; see also Employee Retirement Income Security Act

of 1974, Pub. L. 93-406, sec. 3001(a), 88 Stat. 829, 995.    Notice

may be given "in person, by mailing, by posting, or by printing
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it in a publication of the employer or an employee organization".

Sec. 1.7476-2(c)(1), Income Tax Regs.   Failure to give proper

notice may result in the petition's being dismissed as premature,

and the Court will not conduct a review of the plan.    See sec.

7476(b)(2); Hawes v. Commissioner, 73 T.C. 916, 921 (1980).

     In the present case, petitioner does not contend that he

failed to receive notice.    In fact, petitioner concedes that he

did indeed receive notice in person of the pending application

and filed timely comments with the District Director before the

determination was made.    See sec. 1.7476-2(c)(1), Income Tax

Regs.    The IRS considered petitioner's comments while the

application was pending and issued a determination with respect

to the plan.    Under these circumstances, we do not find that

defective notice is a ground for plan disqualification, or that

petitioner's filing of his petition was premature.     See sec.

7476(b)(2).    Accordingly, we do not dismiss his petition on this

basis.

     Petitioner also complains about the rate of return on plan

assets and expresses his desire for a section 401(k) plan instead

of the MAIL Plan.    Respondent contends that petitioner's

arguments regarding the low rate of return and his desire to have

his assets transferred into another type of plan would not result

in plan disqualification and therefore do not amount to an actual

controversy.
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     We agree with respondent that even if the plan has a low

rate of return, no actual controversy exists because petitioner

has not raised an issue that would put at risk the qualification

of the plan under section 401.

     Petitioner complains that the MAIL Plan's rate of return is

unsatisfactory, and that he did not vote for this plan.      There is

no requirement in section 401, or in related provisions, that a

retirement plan grow at a specified rate, or that its

participants be satisfied with the rate of return.      Likewise,

there is no requirement that the plan be approved by all present

employees.   Thus, petitioner raises no argument that calls into

question the qualified status of the plan under section 401 and

related provisions.

     Petitioner's primary request is that we terminate the MAIL

Plan.   However, section 7476 authorizes the Court only to make

declarations with respect to the initial qualification, the

continuing qualification, or the failure to make a determination

with respect to a retirement plan.       Thus, section 7476 allows us

only to review the qualification of the plan.      It does not afford

the remedy of termination of a retirement plan.

     This appears to be a dispute between petitioner and the MAIL

Plan administrators.   Accordingly, we find that there is no

actual controversy over which we have jurisdiction under section
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7476(a), and we do not address whether petitioner is an

interested party.   Respondent's motion to dismiss will be

granted.

                                       An appropriate order of

                               dismissal for lack of jurisdiction

                               will be entered.
