• The 412(i) plan was a defined benefit plan designed for small business owners in the United States.

  • A 412(i) was a tax benefit plan, meaning that the owner’s contributions to the plan became a tax deduction for the company.
  • Guaranteed annuities or a combination of annuities and life insurance were the only things that could fund the plan.
  • Due to tax avoidance schemes that were used under section 412(i), the Internal Revenue Service (IRS) replaced it with section 412(e)(3).