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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
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