This publication explains the significance of your favorable
determination letter, points out some features that may affect the qualified
status of your employee retirement plan and nullify your determination letter
without specific notice from us, and provides general information on the
reporting requirements for your plan. An example
of a determination letter is included.
Significance of a Favorable
An employee retirement plan qualified under Internal Revenue Code
section 401(a) (qualified plan) is entitled to favorable tax treatment.
For example, contributions made in accordance with the plan document are
generally currently deductible. However, participants will not include these
contributions into income until the time they receive a distribution from the
plan, at which time special income averaging rates for lump sum distributions
may serve to reduce the tax liability. In some cases, taxation may be further
deferred by rollover to another qualified plan or individual retirement
arrangement. (See Publication 575, Pension and Annuity Income, for further
details.) Finally, plan earnings may accumulate free of tax.
Employee retirement plans that fail to satisfy the requirements under Code
section 401(a) are not entitled to favorable tax treatment. Therefore,
many employers desire advance assurance that the terms of their plans satisfy
the qualification requirements. The Internal Revenue Service provides such
advance assurance by means of the determination letter program. A favorable
determination letter indicates that, in the opinion of the Service, the terms
of the plan conform to the requirements of Internal Revenue Code
section 401(a). In addition, a favorable determination letter may indicate
that, on the basis of other information provided in your application, it has
been demonstrated that the plan satisfies certain nondiscrimination
requirements of Code section 401(a). See the following topic, Limitations
of a Favorable Determination Letter, for more details.
Limitations of a Favorable Determination
A favorable determination letter is limited in scope and may also have a limited
useful life. A determination letter generally applies to qualification
requirements regarding the form of the plan. A determination letter may also
apply to other qualification requirements pertaining to the prohibition against
discrimination in favor of highly compensated employees. These requirements are
generally referred to as the coverage and nondiscrimination requirements. They
include the nondiscrimination requirements of section 401(a)(4) of the
Code, the minimum coverage requirements of section 410(b), and certain
The extent to which a determination letter applies to the coverage and
nondiscrimination requirements depends on the terms of the plan, the scope of
the determination you requested, and the additional information you supplied
with your application. Your determination letter will contain specific
statements that will describe the scope of reliance represented by the letter.
In addition, the following apply generally to all determination letters:
The determination letter may not include a statement regarding the minimum
coverage requirements of Code section 410(b); this means that you have
demonstrated that the plan satisfies these requirements by satisfying the
A favorable determination letter means that you have demonstrated that the plan
satisfies the minimum participation requirements of Code
section 401(a)(26). (Letters for certain governmental plans may also
include a statement regarding a special effective date rule.)
If you maintain two or more retirement plans some of which were either not
submitted to the Service for determination or not disclosed on each
application, certain limitations and requirements will not have been considered
on an aggregate basis. Therefore, you may not rely on the determination letter
regarding the plans when considered as a total package.
A determination letter does not consider the special requirements relating to
affiliated service groups or leased employees unless the letter includes a
statement that the requirements of Internal Revenue Code section 414(m)
(affiliated service groups), or 414(n) (leased employees) have been considered.
For plans that are not amended to comply with the final nondiscrimination
regulations retroactively to the 1989 plan year, a determination letter may not
be relied upon as to whether plan provisions satisfy a good faith
interpretation of the requirements of section 401(a)(4) and related
sections of the Code.
No determination letter may be relied on with respect to the effective
availability of benefits, rights, or features under the plan. (See
section 1.401(a)(4)-4(c) of the Income Tax Regulations.) Reliance on
whether benefits, rights, or features are currently available to a
non-discriminatory group of employees is provided to the extent specified in
A determination letter does not consider whether actuarial assumptions are
reasonable for funding or deduction purposes or whether a specific contribution
A determination letter does not consider and may not be relied on with respect
to certain other matters described in section 4.08 of
Rev. Proc. 93-39, 199331 I.R.B. 7 (i.e., whether a plan
amendment is part of a pattern of amendments that significantly discriminates
in favor of highly compensated employees; the use of the substantiation
guidelines contained in Rev. Proc. 93-42, 1993-31 I.R.B. 32; and
certain qualified separate lines of business requirements of
section 414(r) of the Code).
The determination letter applies only to the employer and its participants on
whose behalf the determination letter was issued.
Become familiar with the terms of the determination letter. Please call the
contact person listed on the determination letter if you do not understand any
terms in your determination letter.
Retention of Information. Whether a plan qualifies is determined from the
information in the written plan document and the supporting information
submitted by the employer. Therefore, you must retain copies of any
demonstrations or other information submitted with your application. Such
demonstrations determine the extent of reliance provided by your determination
letter. Failure to retain such Information may limit the scope of reliance on
issues for which demonstrations were provided. The determination letter
will not provide reliance if:
there has been a misstatement or omission of material facts,
the facts subsequently developed are materially different than the facts on
which the determination was made, or
there is a change in applicable law.
Law changes affecting the plan. In general, a determination letter is issued
based on the law in effect at the time the application is received. However,
your letter may include a statement indicating any exception to this rule.
Amendments to the plan. A favorable determination letter may no longer apply if
there is a change in a statute, regulation, or revenue ruling applicable to the
qualification of the plan. However, the determination letter will continue to
apply for years before the effective date of the statute, regulation, or
revenue ruling. If the letter no longer applies to the plan, the plan must be
amended to comply with the new requirements to maintain its qualified status.
Generally, if a regulation changes, the amendment must be adopted by the end of
the first plan year beginning after the adoption date of the regulation.
Generally, if a revenue ruling changes, the amendment must be adopted by the
end of the first plan year beginning after the publication date of the revenue
ruling. Generally the amendment must be effective not later than the first day
of such plan year.
Amendments required by Internal Revenue Code sections 401(a)(17) and
401(a)(31). If the plan is a master or prototype or regional prototype plan,
the determination letter may be relied on with respect to the direct rollover
requirements of Internal Revenue Code section 401(a)(31) and the $150,000
compensation limitation of Internal Revenue Code section 401(a)(17), only
if the sponsor amends the master or prototype or regional prototype plan on
behalf of all adopting employers to satisfy these requirements by
December 31, 1994. In the case of individually designed plans,
letters issued under Rev. Proc. 93-39 consider these requirements.
Extended Reliance. In general, individually designed plans (not master or
prototype, or regional prototype plans) submitted for a determination letter
before July 1, 1994 need not be amended for, or comply in operation with
subsequent Treasury regulations or other guidance (for example, revenue
rulings, notices, etc.) issued by the Service after the date of the plan
determination letter until the last day of the last plan year commencing prior
to January 1, 1999, unless specifically stated otherwise.
However, plans must be amended by any date(s) established for plan amendment by
subsequent legislation. If the determination letter is dated after
June 30, 1994, this extended reliance will apply only d so stated in the
determination letter. Similar reliance applies to master and prototype or
regional prototype plans if the plan sponsor requested a notification
or opinion letter before April 1, 1991.
Plan Must Qualify in Operation
Generally, a plan qualifies in operation if it continues to satisfy the
coverage and nondiscrimination requirements and is maintained according to the
terms on which the favorable determination letter was issued. Changes in facts
and other bases on which the determination letter was issued may mean that the
determination letter may no longer be relied upon.
Some examples of the effect of a plan's operation on a favorable determination
Not meeting nondiscrimination in amount requirement. If the determination letter
states that the plan satisfies the nondiscrimination in amount requirement of
section 1.401(a)(4)-1(b)(2) of the regulations on the basis of a
design-based safe harbor, the plan will generally continue to satisfy this
requirement in operation n the plan is maintained according to its terms. If
the determination letter states that the plan satisfies the nondiscrimination
in amount requirement on the basis of a nondesign-based safe harbor or a
general test, and the plan subsequently fails to meet this requirement in
operation, the letter may no longer be relied upon with respect to this
Not meeting minimum coverage requirements. If the determination letter does not
include a statement regarding the minimum coverage requirements of Code
section 410(b), this means that the plan satisfies these requirements by
satisfying the ratio-percentage test. However, if the plan subsequently fails
to satisfy the ratio-percentage test in operation, the letter may no longer be
relied upon with respect to the coverage requirements. Likewise, if the
determination letter states the plan satisfies the average benefit test, the
letter may no longer be relied on with respect to the coverage requirements
once the plan fails to satisfy the average benefit test in operation.
Changes in testing methods. If the determination letter is based in part on a
demonstration that a coverage or nondiscrimination requirement is satisfied,
and, in the operation of the plan, the method used to test that this
requirement continues to be satisfied is changed (or is required to be changed
because the facts have changed) from the method employed in the demonstration,
the letter may no longer be relied upon with respect to this requirement.
Contributions or benefits in excess of the limitations under Code
section 415. A retirement plan may not provide retirement benefits or, in
the case of a defined contribution plan, contributions and other additions,
that exceed the limitations specified in Internal Revenue Code
section 415. Your plan contains provisions designed to provide benefits
within these limitations. Please become familiar with these limitations for
your plan will be disqualified if these limitations are exceeded.
Top heavy minimums. If this plan primarily benefits employees who are highly
compensated, it may be a top heavy plan and must provide certain minimum
benefits and vesting for lower compensated employees. If your plan provides the
accelerated benefits and vesting only for years during which the plan is top
heavy, failure to identify such years and to provide the accelerated vesting
and benefits will disqualify the plan.
Actual deferral percentage or contribution percentage tests. If this plan
provides for cash or deferred arrangements, employer matching contributions, or
employee contributions, the determination letter
does not consider whether special discrimination tests described in Code
section 401(k)(3) or 401(m)(2) have been satisfied in operation.
Most plan administrators or employers who maintain an employee benefit plan must
file an annual return/report with the Internal Revenue Service. The following
is a general discussion of the forms to be used for this purpose. See the
instructions to each form for specific information:
Form 5500-EZ, Annual Return of One Participant (Owners and their Spouses)
Pension Benefit Plans - generally for a "One-participant Plan', which
is a plan that covers only:
an individual, or an individual and his or her spouse who wholly own a business
whether incorporated or not; or
partner(s) in a partnership or the partner(s) and the partner's spouse.
If Form 5500-EZ cannot be used, the one-participant plan should use
Form 5500-C/R, Return/Report of Employee Benefit Plan.
A "one-participant' plan that has no more than $100,000 in assets at the
end of the plan year is not required to file a return. However,
Form 5500-EZ must be filed for any subsequent year in which plan assets
exceed $100,000. If two or more one-participant plans have more than $100,000
in assets, a separate Form 5500-EZ must be filed for each plan.
A "Final' Form 5500-EZ must be filed if the plan is terminated or if
assets drop below $100,000 and you wish to stop filing Form 5500-EZ.
Form 5500, Annual Return/Report Of Employee Benefit Plan - for a pension benefit
plan with 100 or more participants at the beginning of the plan year.
Form 5500-C/R, Return/Report of Employee Benefit Plan - for each pension benefit
plan with more than one but fewer than 100 participants at the beginning of the
plan year. Form 5500-C/R takes the place of separate Forms 5500-C and
5500-R. Filing only the first two pages of Form 5500-C/R constitutes the
filing of Form 5500-R for plan years for which Form 5500-C is not
Note. Keogh (HR-10) plans having over $100,000 in assets are required to file an
annual return even if the only participants are owner-employees. The term
"owner-employee' includes a partner who owns more than 10% interest in
either the capital or profits of the partnership. This applies to both defined
contribution and defined benefit plans.
When to file. Forms 5500 and 5500-EZ must be filed annually.
Form 5500-C must be filed for (i) the initial plan year,
(ii) the year a final return/report would be filed, and (iii) at
Form 5500-R pages 1 and 2 of Form 5500-C/R) must be filed in
the years when 5500-C is not filed. However, 5500-C will be accepted
in place of 5500-R.
Form 5330 for prohibited transactions - Transactions between a plan and
someone having a relationship to the plan (disqualified person) are prohibited,
unless specifically exempted from this requirement. A few examples are loans,
sales and exchanges of property, leasing of property, furnishing goods or
services, and use of plan assets by the disqualified person. Disqualified
who engage in a prohibited transaction for which there is no exception must file
Form 5330 by the last day of the seventh month after the end of the tax
year of the disqualified person.
Form 5330 for tax on nondeductible employer contributions to qualified plans -
If contributions are made to this plan in excess of the amount deductible, a
tax is imposed upon the excess contribution. Form 5330 must be filed by
the last day of the seventh month after the end of the employer's tax year.
Form 5330 for tax on excess contributions to cash or deferred arrangements or
excess employee contributions or employer matching contributions - If a
plan includes a cash or deferred arrangement (Code section 401(k)) or
provides for employee contributions or employer matching contributions (Code
section 401(m)), then excess contributions that would cause the plan to
fail the actual deferral percentage or the actual contribution percentage test
are subject to a tax unless the excess is eliminated within 2 1/2 months
after the end of the plan year. Form 5330 must be filed by the due date of
the employer's tax return for the plan year in which the tax was incurred.
Form 5330 for tax on reversions of plan assets - Under Code section 4980, a
tax is payable on the amount of any employer reversion of plan assets.
Form 5330 must be filed by the last day of the month following the month
in which the reversion occurred.
Form 5310-A for certain transactions - Under Code section 6058(b), an
actuarial statement is required at least 30 days before a merger,
consolidation, or transfers (including spin-offs) of assets to another plan.
This statement is required for all plans. However, penalties for non-filing
will not apply to defined contribution plans for which:
The sum of the account balances in each plan equals the fair market value of
all plan assets,
The assets of each plan are combined to form the assets of the plan as merged,
Immediately after a merger, the account balance of each participant is equal to
the sum of the account balances of the participant immediately before the
The plans must not have an unamortized waiver or unallocated suspense account.
Penalties will also not apply if the assets transferred are less than three
percent of the assets of the plan involved in the transfer (spin-off), and the
transaction is not one of a series of two or more transfers (spin-off
transactions) that are, in substance, one transaction.
The purpose of the above discussions is to illustrate some of the principal
filing requirements that apply to pension plans. This listing is not an
exclusive listing of all returns and schedules that must be filed.
Disclosure. The Internal Revenue Service will process the returns and provide
the Department of Labor and the Pension Benefit Guaranty Corporation with the
necessary information and copies of the returns on microfilm for disclosure
1100 Commerce St. Code 431 In
reply refer to: 75260006Springfield
AS 99001 Dec. 04, 1987 LTR 835AU
73-0793565P 0000 74 001
Input 0p: 75018508 00016
Flimflam & Jones, P.C.
1000 Ajax Life Bldg
PLANO AS 99103
District Office Code and
Case Serial Number: 73737028 EP
Name of Plan: Flimflam & Jones Profit Sharing Plan
Application Form: 5301
Date Amended: 030386
Employer Identification Number: 73-0793565
Plan Number: 001
File Number: 730000488
Based on the information supplied, we have made a favorable determination on
your application identified above. Please keep this letter in your permanent
Continued qualification of the plan will depend on its effect in operation under
its present form. (See Section 1.401-1(b)(3) of the Income Tax
Regulations.) The status of the plan in operation will be reviewed
The enclosed document describes some events that could occur after you receive
this letter that would automatically nullify it without specific notice from
us. The document also explains how operation of the plan may affect a favorable
determination letter, and contains information about filing requirements.
This letter relates only to the status of your plan under the Internal Revenue
Code. It is not a determination regarding the effect of other federal or local
This determination is not a ruling on the effect of reclamination on the
deferred percentage test.
If you have any questions, please contact E P Tech Assistor at 703-754-1234.
transactions used to avoid Roth IRA contribution limitations, and
substantially similar transactions, as listed transactions for purposes of
§ 1.6011-4(b)(2) of Income Tax Regulations and §§ 301.6111-2(b)(2) and
301.6112-1(b)(2) of Procedure and Administration Regulations.
Part III - Administrative,
Procedural and Miscellaneous
December 31, 2003
U.S. Treasury Notice
Abusive Roth IRA
The Internal Revenue Service
and the Treasury Department are aware of a type of transaction, described below,
that taxpayers are using to avoid the limitations on contributions to Roth IRAs.
This notice alerts taxpayers and their representatives that these transactions
are tax avoidance transactions and identifies these transactions, as well as
substantially similar transactions, as listed transactions for purposes of §
1.6011-4(b)(2) of the Income Tax Regulations and §§ 301.6111-2(b)(2) and
301.6112-1(b)(2) of the Procedure and Administration Regulations. This notice
also alerts parties involved with these transactions of certain responsibilities
that may arise from their involvement with these transactions.
Section 408A was added to
the Internal Revenue Code by section 302 of the Taxpayer Relief Act of 1997,
Pub. L. 105-34, 105th Cong., 1st Sess. 40 (1997). This section created Roth IRAs
as a new type of nondeductible individual retirement arrangement (IRA). The
maximum annual contribution to Roth IRAs is the same maximum amount that would
be allowable as a deduction under § 219 with respect to the individual for the
taxable year over the aggregate amount of contributions for that taxable year to
all other IRAs. Neither the contributions to a Roth IRA nor the earnings on
those contributions are subject to tax on distribution, if distributed as a
qualified distribution described in § 408A(d)(2).
A contribution to a Roth IRA
above the statutory limits generates a 6 - percent excise tax described in §
4973. The excise tax is imposed each year until the excess contribution
In general, these
transactions involve the following parties: (1) an individual (the Taxpayer) who
owns a pre-existing business such as a corporation or a sole proprietorship (the
Business), (2) a Roth IRA within the meaning of § 408A that is maintained for
the Taxpayer, and (3) a corporation (the Roth IRA Corporation), substantially
all the shares of which are owned or acquired by the Roth IRA. The Business and
the Roth IRA Corporation enter into transactions as described below. The
acquisition of shares, the transactions or both are not fairly valued and thus
have the effect of shifting value into the Roth IRA.
transactions in which the Roth IRA Corporation acquires property, such as
accounts receivable, from the Business for less than fair market value,
contributions of property, including intangible property, by a person other than
the Roth IRA, without a commensurate receipt of stock ownership, or any other
arrangement between the Roth IRA Corporation and the Taxpayer, a related party
described in § 267(b) or 707(b), or the Business that has the effect of
transferring value to the Roth IRA Corporation comparable to a contribution to
the Roth IRA.
The transactions described
in this notice have been designed to avoid the statutory limits on contributions
to a Roth IRA contained in § 408A. Because the Taxpayer controls the Business
and is the beneficial owner of substantially all of the Roth IRA Corporation,
the Taxpayer is in the position to shift value from the Business to the Roth IRA
Corporation. The Service intends to challenge the purported tax benefits claimed
for these arrangements on a number of grounds.
In challenging the purported
tax benefits, the Service will, in appropriate cases, assert that the substance
of the transaction is that the amount of the value shifted from the Business to
the Roth IRA Corporation is a payment to the Taxpayer, followed by a
contribution by the Taxpayer to the Roth IRA and a contribution by the Roth IRA
to the Roth IRA Corporation. In such cases, the Service will deny or reduce the
deduction to the Business; may require the Business, if the Business is a
corporation, to recognize gain on the transfer under § 311(b); and may require
inclusion of the payment in the income of the Taxpayer (for example, as a
taxable dividend if the Business is a C corporation). See Sammons v. United
States, 433 F.2d 728 (5th Cir. 1970); Worcester v. Commissioner, 370 F.2d 713
(1st Cir. 1966).
Depending on the facts of
the specific case, the Service may apply § 482 to allocate income from the Roth
IRA Corporation to the Taxpayer, Business, or other entities under the control
of the Taxpayer. Section 482 provides the Secretary with authority to allocate
gross income, deductions, credits or allowances among persons owned or
controlled directly or indirectly by the same interests, if such allocation is
necessary to prevent evasion of taxes or clearly to reflect income. The § 482
regulations provide that the standard to be applied is that of a person dealing
at arm's length with an uncontrolled person. See generally § 1.482-1(b) of the
Income Tax Regulations. To the extent that the consideration paid or received in
transactions between the Business and the Roth IRA Corporation is not in
accordance with the arm's length standard, the Service may apply § 482 as
necessary to prevent evasion of taxes or clearly to reflect income. In the event
of a § 482 allocation between the Roth IRA Corporation and the Business or other
parties, correlative allocations and other conforming adjustments would be made
pursuant to § 1.482-1(g). Also see, Rev. Rul. 78-83, 1978-1 C.B. 79.
In addition to any other tax
consequences that may be present, the amount treated as a contribution as
described above is subject to the excise tax described in § 4973 to the extent
that it is an excess contribution within the meaning of § 4973(f). This is an
annual tax that is imposed until the excess amount is eliminated.
Moreover, under § 408(e)(2)(A), the Service may take
the position in appropriate cases that the transaction gives rise to one or
more prohibited transactions between a Roth IRA and a disqualified person
described in § 4975(e)(2). For example, the Department of Labor
has advised the Service that, to the extent that the Roth IRA Corporation
constitutes a plan asset under the Department of Labor's plan asset regulation
(29 C.F.R. § 2510.3-101), the provision of services by the Roth IRA Corporation
to the Taxpayer's Business (which is a disqualified person with respect to the
Roth IRA under § 4975(e)(2)) would constitute a prohibited transaction under §
Further, the Department of Labor has advised the Service that, if a transaction
between a disqualified person and the Roth IRA would be a prohibited
transaction, then a transaction between that disqualified person and the Roth
IRA Corporation would be a prohibited transaction if the Roth IRA may, by
itself, require the Roth IRA Corporation to enter into the transaction.
The following transactions
are identified as "listed transactions" for purposes of §§ 1.6011-4(b)(2),
301.6111-2(b)(2) and 301.6112-1(b)(2) effective December 31, 2003, the date this
document is released to the public: arrangements in which an individual, related
persons described in § 267(b) or 707(b), or a business controlled by such
individual or related persons, engage in one or more transactions with a
corporation, including contributions of property to such corporation,
substantially all the shares of which are owned by one or more Roth IRAs
maintained for the benefit of the individual, related persons described in §
267(b)(1), or both. The transactions are listed transactions with respect to the
individuals for whom the Roth IRAs are maintained, the business (if not a sole
proprietorship) that is a party to the transaction, and the corporation
substantially all the shares of which are owned by the Roth IRAs. Independent of
their classification as "listed transactions," these transactions may already be
subject to the disclosure requirements of § 6011 (§ 1.6011-4), the tax shelter
registration requirements of § 6111 (§§ 301.6111-1T and 301.6111-2), or the list
maintenance requirements of § 6112 (§ 301.6112-1).
transactions include transactions that attempt to use a single structure with
the intent of achieving the same or substantially same tax effect for multiple
taxpayers. For example, if the Roth IRA Corporation is owned by multiple
taxpayers' Roth IRAs, a substantially similar transaction occurs whenever that
Roth IRA Corporation enters into a transaction with a business of any of the
taxpayers if distributions from the Roth IRA Corporation are made to that
taxpayer's Roth IRA based on the purported business transactions done with that
taxpayer's business or otherwise based on the value shifted from that taxpayer's
business to the Roth IRA Corporation.
Persons required to register
these tax shelters under § 6111 who have failed to do so may be subject to the
penalty under § 6707(a). Persons required to maintain lists of investors under §
6112 who have fail to do so (or who fail to provide such lists when requested by
the Service) may be subject to the penalty under § 6708(a). In addition, the
Service may impose penalties on participants in this transaction or
substantially similar transactions, including the accuracy related penalty under
§ 6662, and as applicable, persons who participate in the reporting of this
transaction or substantially similar transactions, including the return preparer
penalty under § 6694, the promoter penalty under § 6700, and the aiding and
abetting penalty under § 6701.
The Service and the Treasury
recognize that some taxpayers may have filed tax returns taking the position
that they were entitled to the purported tax benefits of the type of transaction
described in this notice. These taxpayers should consult with a tax advisor to
ensure that their transactions are disclosed properly and to take appropriate
The principal author of this
notice is Michael Rubin of the Employee Plans, Tax Exempt and Government
Entities Division. However, other personnel from the Service and Treasury
participated in its development. Mr. Rubin may be reached at (202) 283-9888 (not
a toll-free call).
Under section 102 of Reorganization Plan No. 4 of 1978 (43 FR 47713), the
Secretary of Labor has interpretive jurisdiction over § 4975 of the Internal
For the Roth IRA Corporation to be considered as holding plan assets under
the Department of Labor's plan asset regulation, the Roth IRA's investment
in the Roth IRA Corporation must be an equity interest, the Roth IRA
Corporation's securities must not be publicly-offered securities, and the
Roth IRA's investment in the Roth IRA Corporation must be significant. 29
C.F.R. §§ 2510.3-101(a)(2), 2510.3-101(b)(1), 2510.3-101(b)(2), and
2510.3-101(f). Although the Roth IRA Corporation would not be treated as
holding plan assets if the Roth IRA Corporation constituted an operating
company within the meaning of 29 C.F.R. § 2510.3-101(c), given the context
of the examples described in this notice, it is unlikely that the Roth IRA
Corporation would qualify as an operating company.