the investment in the contract bears to the account balance. Sec. 72(e)(8)(A) and (B).

In determining the taxability of petitioner's IRA distribution from Loyola, it is necessary to determine the amount of the distribution allocable to the "investment in the contract". In dispute in this case is the meaning of the phrase "aggregate amount of * ** consideration paid for the contract" found in section 72(e)(6), and whether the phrase encompasses the excess contribution made by petitioner in the amount of $80,900. If petitioner's contribution is considered to be an amount paid in consideration for an IRA and, thus, is an "investment in the contract", then section 72 would provide a basis for petitioner's excess contribution and, upon distribution, such amount would be distributed tax free. However, if petitioner's excess contribution is not consideration paid for an IRA and, thus, is not an "investment in the contract", then section 72 would not provide a basis in petitioner's excess contribution and, upon distribution, such amount would be taxed in full.

The parties agree that the plain meaning of the language in section 72(e)(6), i.e., “amount of *** consideration paid for the contract", would include petitioner's excess contribution. Petitioners essentially urge us to adopt a plain language interpretation of section 72(e)(6) that would give petitioner a basis in his excess contribution. Respondent contends, however, that a literal interpretation of section 72(e)(6) reaches. a result contrary to legislative intent. Specifically, respondent contends that in amending section 408(d)(1), Congress intended to provide a basis for nondeductible contributions as contemplated by section 408(0), but did not intend to provide a basis for any contributions in excess of the section 408(0) limits. Thus, respondent urges us to look beyond the words of the statute to interpret its meaning.

In construing section 72(e)(6), our task is to give effect to the intent of Congress, and we must begin with the statutory language, which is the most persuasive evidence of the statutory purpose. United States v. American Trucking Associations, Inc., 310 U.S. 534, 542-543 (1940). Ordinarily, the plain meaning of the statutory language is conclusive. United States v. Ron Pair Enters. Inc., 489 U.S. 235, 242 (1989). Where a statute is silent or ambiguous, we may look to legislative history in an effort to ascertain congressional intent.

Burlington N. R.R. v. Oklahoma Tax Commn., 481 U.S. 454, 461 (1987); Griswold v. United States, 59 F.3d 1571, 15751576 (11th Cir. 1995). However, where a statute appears to be clear on its face, we require unequivocal evidence of legislative purpose before construing the statute so as to override the plain meaning of the words used therein. Huntsberry v. Commissioner, 83 T.C. 742, 747-748 (1984); see Pallottini v. Commissioner, 90 T.C. 498, 503 (1988), and cases there cited. 2. Section 72(e)(6)

Thus, we turn to the words of section 72(e)(6) that define investment in the contract, as relevant herein, as "the aggregate amount of *** consideration paid for the contract * * * minus the aggregate amount received under the contract". In the instant case, petitioner invested, or paid, $82,900 for his IRA with Loyola. Interpreted literally, section 72(e)(6) would treat such amount as the "investment in the contract" because the contribution was the consideration paid by petitioner for the contract.

3. Legislative History

We find nothing ambiguous in the statute, and, accordingly, feel controlled by its clear language. However, respondent contends that a literal interpretation of section 72(e)(6) reaches a result contrary to legislative intent. Thus, we have examined the legislative histories of the 1974 enactment of section 408(d)(1), its subsequent amendment in 1986, and the 1986 enactment of section 408(o). As discussed below, we are not satisfied that the legislative history relied upon by respondent rises to the level of unequivocal evidence of legislative purpose sufficient to override the literal language of the controlling statute.

In the Employee Retirement Income Security Act of 1974, (ERISA), Pub. L. 93-406, 88 Stat. 829, Congress enacted section 408(a), which provided for the creation of individual retirement accounts. In adopting the individual retirement provisions of ERISA, the goal of Congress was to create a system whereby employees not covered by qualified retirement plans would have the opportunity to set aside at least some retirement savings on a tax-sheltered basis. See H. Rept. 93807, at 126 (1974), 1974-3 C.B. (Supp.) 236, 361; S. Rept.

93-383, at 131 (1973), 1974–3 C.B. (Supp.) 80, 210. Under the statutory framework thus established, individuals could obtain a limited deduction for amounts contributed to individual retirement accounts while earnings on such amounts would accrue tax free. See secs. 219, 408, 409; see also Orzechowski v. Commissioner, 69 T.C. 750, 752–753 (1978), affd. 592 F.2d 677 (2d Cir. 1979); H. Rept. 93-807, supra at 126-127, 1974-3 C.B. (Supp.) at 361-362; S. Rept. 93-383, supra at 130, 1974-3 C.B. (Supp.) at 209. Individuals who were active participants in employer-sponsored plans were not permitted to make deductible IRA contributions because they were already benefiting as participants in tax-favored plans. See sec. 219(b)(2) as originally enacted by ERISA sec. 2002, 88 Stat. 958.

The individual retirement account provisions of ERISA expressly provided that a distribution from an IRA was fully taxable to the distributee upon distribution. Specifically, section 408(d)(1), as originally enacted by ERISA, provided:

any amount paid or distributed out of an [IRA] * ** shall be included in gross income by the payee or distributee *** for the taxable year in which the payment or distribution is received. The basis of any person in such an account or annuity is zero. [Emphasis added.]

The committee report reveals that Congress intended for taxpayers to have a zero basis in their IRA's because "neither the contributions nor the earnings thereon will have been subject to tax previously." H. Rept. 93-779, at 126 (1974), 1974-3 C.B. 244, 369; see also H. Conf. Rept. 93–1280, at 339 (1974), 1974-3 C.B. 415, 500.

In adopting the IRA provisions of ERISA, Congress recognized that, despite the dollar limitation on deductible contributions to an IRA, a taxpayer might have an incentive to make nondeductible contributions to an IRA because the tax on the earnings would be deferred. See H. Rept. 93–779, supra at 136, 1974-3 C.B. at 371; H. Conf. Rept. 93–1280, supra at 340, 1974-3 C.B. at 501. Accordingly, Congress enacted sanctions to prevent excess contributions and the misuse of IRA's. In particular, Congress imposed a 6-percent excise tax on excess contributions to an IRA in order to offset the benefit that would otherwise result from the deferral of tax on the earnings in the IRA. See sec. 4973. Additionally, Congress continued to fully tax excess contributions upon

distribution, despite the fact that such contributions were made with after-tax dollars. H. Conf. Rept. 93-1280, supra at 340, 1974-3 C.B. at 501; H. Rept. 93-807, supra at 130-131, 1974-3 C.B. (Supp.) at 365–366. Significantly, the ERISA conference report states, in pertinent part, as follows:

In general, where contributions in excess of the deductible limits are made to an individual retirement account, no deduction is allowed for the excess amount, and this amount will be subject to a 6 percent tax for the year in which it is made, and each year thereafter, until there is no excess. The distribution is not to be includible in income if the excess is distributed to the individual on or before the due date for filing the employee's tax return for the year in question (including extensions). If the distribution occurs after that date, however, the distribution is to constitute taxable income to the employee (because his basis in his account is always zero) and will also give rise to a 10-percent additional tax if the distribution occurs before the employee is 592. [H. Conf. Rept. 93-1280, supra at 340, 19743 C.B. at 501; emphasis added.]

As this excerpt illustrates, in enacting section 408(d)(1), Congress consciously and expressly declined to provide a taxpayer with a basis in IRA contributions exceeding the deductible limit. This created the possibility that a taxpayer could be fully taxed on an IRA distribution funded with after-tax contributions.

In the Tax Reform Act (TRA) of 1986, Pub. L. 99-514, 100 Stat. 2085, Congress made two significant changes to the IRA provisions. First, Congress enacted section 408(0), which permits individuals to make “designated nondeductible contributions" to the extent that deductible contributions are not allowable because of the "active participant" rule.13 Although such contributions are not deductible from gross income, they are not subject to the excise tax on excess contributions under section 4973. Sec. 4973(b), flush language; see sec. 408(o)(2). Moreover, the earnings on such contributions are permitted to accumulate on a tax-deferred basis and without incurring any excise tax under section 4973. Sec. 408(o); see S. Rept. 99-313, at 543 (1986), 1986-3 C.B. (Vol. 3) 543. Sec

13 In the Economic Recovery Tax Act of 1981, Pub. L. 97-34, 95 Stat. 172, Congress eliminated the active participant restriction and extended IRA availability to all taxpayers. However, 5 years later, in the Tax Reform Act of 1986, Pub. L. 99-514, sec. 1101(a)(1), 100 Stat. 2085, 2411, Congress enacted sec. 219(g), which reinstated rules imposing restrictions on the availability of IRA deductions to active participants; i.e., individuals covered by an employer-provided retirement plan. Thus, Congress enacted sec. 408(0) in an effort to provide a tax incentive for discretionary retirement savings for individuals considered active participants in qualified retirement plans.

ond, Congress amended section 408(d)(1) to provide an individual with a basis in his or her IRA to the extent of the individual's "investment in the contract".

The conference report to the TRA of 1986 discussed the new approach to taxing IRA distributions as follows:

if an individual withdraws an amount from an IRA during a taxable year and the individual has previously made both deductible and nondeductible IRA contributions, then the amount *** [excludable from] income for the taxable year is the portion of the amount withdrawn which bears the same ratio to the amount withdrawn for the taxable year as the individual's aggregate nondeductible IRA contributions bear to the aggregate balance of all IRAs of the individual ***. [H. Conf. Rept. 99-841 (Vol. II), at II379 (1986), 1986–3 C.B. (Vol. 4) at 379; emphasis added.]

This excerpt illustrates that Congress intended to provide a basis in "nondeductible contributions". However, nowhere in the legislative history to the TRA of 1986 did Congress address the tax treatment of excess contributions upon distribution.

Respondent asserts that petitioners' interpretation of section 72(e)(6) significantly changes the law and creates a basis in excess contributions where, historically, no basis had been allowed. To the contrary, it was Congress that significantly changed the law by creating basis where none had previously existed. Thus, prior to the TRA of 1986, all IRA distributions, even those the genesis of which was in after-tax contributions, were fully taxed to the taxpayer in the year of distribution because "the basis of any person in *** [an IRA was] zero." Sec. 408(d)(1) as originally enacted by ERISA. However, in the TRA of 1986 Congress amended section 408(d)(1) by striking the language mandating that taxpayers have a zero basis in their IRA and by substituting therefor an "investment in the contract" approach in taxing IRA distributions. This amendment removes the legislative underpinnings for double taxation upon which respondent heavily relies in this

case.

In 1974, when Congress decided to include in income the distribution of excess contributions, it clearly and explicitly required such inclusion in both the language of section 408(d)(1) and in the legislative history of such section. See sec. 408(d)(1), as originally enacted by ERISA; H. Conf. Rept. 93-1280, supra at 340, 1974-3 C.B. at 501. However, in amending section 408(d)(1) in 1986, Congress omitted any