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chapter 10-coverage and nondiscrimination - IRS tax forms

chapter 10- Coverage and nondiscrimination Page 10-1 Coverage and nondiscrimination chapter 10 Coverage and nondiscrimination Demo 6 By Terry Bates (Atlanta) And John Almquist (Pacific Coast) and Al Reich Reviewers INTERNAL REVENUE SERVICE TAX EXEMPT AND GOVERNMENT ENTITIES Introduction Purpose of chapter Coverage and nondiscrimination has been the subject of major CPE Chapters in 1997 ( chapter 1 Guide to Coverage and Discrimination Issues), 2002 ( chapter 7 Coverage and nondiscrimination with Emphasis on determinations processing) and 2003 ( chapter 1 nondiscrimination detailed review of demonstrations). The understanding of Coverage and nondiscrimination is vital. This chapter contains traditional coverage rules, current updates and an emphasis on Demonstration 6 New Comparability , including the Gateways, and Cross-Testing.

Chapter 10- Coverage and Nondiscrimination Page 10-6 Coverage and nondiscrimination The Ratio Percentage Test Introduction The ratio percentage test is satisfied if the plan’s “ratio percentage” is greater than or equal to 70%.

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