26 U.S.C. § 1372
Section 1372 · Partnership rules to apply for fringe benefit purposes
Amended 1 time on record
Applied in 113 court decisions — leading case Donahue v. Rodd Electrotype Co. of New England, Inc. (1975)
Most recently applied in Oracle Corp. and Subsidiaries II v. Dept. of Rev. (October 2021)
Cases citing this section usually also cite 26 U.S.C. § 1371 · 26 U.S.C. § 1373 · 26 U.S.C. § 1374
How often courts cite this section
Court decisions citing this, by year.Markers show enactment and consequential amendments — watch for a citation surge after a change. The dip in the last several years is a data-coverage gap, not a real trend — our corpus holds fewer opinions from the most recent years, so recent citations are undercounted.
For purposes of applying the provisions of this subtitle which relate to employee fringe benefits—
(1) the S corporation shall be treated as a partnership, and
(2) any 2-percent shareholder of the S corporation shall be treated as a partner of such partnership.
For purposes of this section, the term “2-percent shareholder” means any person who owns (or is considered as owning within the meaning of section 318) on any day during the taxable year of the S corporation more than 2 percent of the outstanding stock of such corporation or stock possessing more than 2 percent of the total combined voting power of all stock of such corporation.
Editorial notes U.S. Code · Office of the Law Revision Counsel
Prior Provisions
A prior section 1372, added Pub. L. 85–866, title I, §64(a), Sept. 2, 1958, 72 Stat. 1650; amended Pub. L. 87–29, §2, May 4, 1961, 75 Stat. 64; Pub. L. 89–389, §§2(b)(2), 3(a), Apr. 14, 1966, 80 Stat. 114; Pub. L. 91–683, §1(a), Jan. 12, 1971, 84 Stat. 2067; Pub. L. 94–455, title IX, §902(c)(3), title XIX, §§1901(a)(149), 1906(b)(13)(A), Oct. 4, 1976, 90 Stat. 1609, 1788, 1834; Pub. L. 95–600, title III, §343, Nov. 6, 1978, 92 Stat. 2843; Pub. L. 95–628, §5(a), (b), Nov. 10, 1978, 92 Stat. 3628, related to manner, effect, termination, etc., of an election not to be subject to taxes imposed under this chapter, prior to the general revision of this subchapter by section 2 of Pub. L. 97–354.
Effective Date
Section applicable to taxable years beginning after Dec. 31, 1982, except that in the case of a taxable year beginning during 1982, sections 1362(d)(3), 1366(f)(3), and 1375 of this title shall apply and subsec. (e)(5) of this section as in effect on the day before Oct. 19, 1982, shall not apply, see section 6(a), (b)(3), of Pub. L. 97–354, set out as a note under section 1361 of this title. For additional provisions relating to the treatment of existing fringe benefit plans and the application of this section, see section 6(d) of Pub. L. 97–354, set out as a note under section 1361 of this title.