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the assets of IRA #1 in his own interest. Section 4975(c)(1)(E)
addresses itself only to acts of disqualified persons who, as
fiduciaries, deal directly or indirectly with the income or
assets of a plan for their own benefit or account. Here, there
was no such direct or indirect dealing with the income or assets
of a plan, as the dividends paid by Worldwide did not become
income of IRA #1 until unqualifiedly made subject to the demand
of IRA #1. Sec. 1.301-1(b), Income Tax Regs. Furthermore,
respondent has never suggested that petitioner, acting as a
"fiduciary" or otherwise, ever dealt with the corpus of IRA #1
for his own benefit.
Based on the record, the only direct or indirect benefit
that petitioner realized from the payments of dividends by
Worldwide related solely to his status as a participant of IRA
#1. In this regard, petitioner benefited only insofar as IRA #1
accumulated assets for future distribution. Section 4975(d)(9)
states that section 4975(c) shall not apply to:
receipt by a disqualified person of any benefit to
which he may be entitled as a participant or
beneficiary in the plan, so long as the benefit is
computed and paid on a basis which is consistent with
the terms of the plan as applied to all other
participants and beneficiaries.
Thus, we find that under the plain meaning17 of section
4975(c)(1)(E), respondent was not substantially justified in
17
See the discussion supra note 16 regarding application of a
statute's plain meaning.
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