Gaylord W. Greenlee - Page 7

                                        - 7 -                                         

                                     Discussion                                       
               The primary issue we must decide is whether petitioner                 
          engaged in a prohibited transaction so as to be subject to the              
          first-tier excise tax under section 4975(a).  Section 4975(a)               
          imposes a 5-percent excise tax on any disqualified person who               
          participates in a prohibited transaction.                                   
               Respondent determined that petitioner is a disqualified                
          person under section 4975(e)(2)(A), (E), and (H) who engaged in a           
          prohibited transaction under section 4975(c)(1)(D) and (E).                 
          Respondent's determination is presumed correct, and the burden is           
          on petitioner to disprove her determination.  Rule 142(a);                  
          Welch v. Helvering, 290 U.S. 111, 115 (1933); Laird v.                      
          Commissioner, 85 F.2d 598, 599 (3d Cir. 1935), affg. 29 B.T.A.              
          196 (1933).  Petitioner argues that he is not a disqualified                
          person who engaged in a prohibited transaction or, alternatively,           
          that he should be exempt from the excise tax.                               
          A.  "Disqualified Person"                                                   
               The term "disqualified person" includes fiduciaries and                
          people owning 50 percent or more of the corporation sponsoring              
          the Plan.  Sec. 4975(e)(2)(A), (E).  "Fiduciaries" include                  
          persons who exercise discretionary authority over the management            
          of a plan or its assets.  Sec. 4975(e)(3).  A plan administrator            
          is a fiduciary where he or she has the day-to-day administrative            







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  Next

Last modified: May 25, 2011