-2-
First-TierSecond-Tier Additions to Tax
Tax Year DeficiencyDeficiencySec. Sec. Sec.
Ended Sec. 4975(a) Sec. 4975(b) 6653(a)(1)(A)6653(a)(1)6651(a)(1)
12/31/86 $11,215 -- $560.75 -- $2,803.75
12/31/87 11,215 -- 560.75 -- 2,803.75
12/31/88 11,215 -- -- $560.75 2,803.75
12/31/89 11,215 -- -- -- 2,803.75
12/31/90 11,215 -- -- -- 2,803.75
12/31/91 11,215 -- -- -- 2,803.75
12/31/92 11,215 -- -- -- 2,803.75
12/31/93 11,215 -- -- -- 2,803.75
08/18/94 -- $224,298 -- -- --
This case involves the question of whether an assignment of
accounts receivable by petitioner to a defined benefit plan was a
prohibited transaction giving rise to an excise tax under section
4975, which was added to the Code by section 2003(a) of the
Employee Retirement Income Security Act of 1974 (ERISA), Pub. L.
93-406, 88 Stat. 829, 971. More specifically, the issues for
decision are: (1) Whether the assignment of an employer's
accounts receivable to a defined benefit plan is a prohibited
transaction within the meaning of section 4975(c), resulting in
petitioner's being liable under section 4975(a); (2) whether the
assignment of accounts receivable was not corrected within the
meaning of section 4975(f)(5), resulting in petitioner's being
liable under section 4975(b); (3) whether petitioner is liable
1(...continued)
Procedure.
2 Respondent concedes that petitioner is not subject to the
first-tier excise tax of sec. 4975(a) or any additions to tax for
the taxable years 1986 and 1987, as determined in the notice of
deficiency. Additionally, respondent concedes petitioner is not
subject to an addition to tax under sec. 6653(a)(1) for the
taxable year ended Dec. 31, 1988.
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