Neil M. Baizer - Page 5

          H. Bogart notes receivable of $186,229.72 were eliminated and               
          replaced with a contribution receivable.                                    
               On or about May 31, 1988, the Corporation transferred                  
          $273,558 (face value) of its accounts receivable to the Plan for            
          the purpose of satisfying, in part, the Corporation's funding               
          obligation under section 412.  At this time, the Corporation was            
          indebted to the Plan in the amount of $184,571 plus interest in             
          the amount of $24,609.47.  This transfer was implemented by two             
          documents:  "Assignment of Accounts Receivable" and "Agreement".            
          Both documents were dated May 31, 1988, and both were signed by             
          Mr. Cohen as President of the Corporation and by petitioner as              
          Secretary of the Corporation.  According to the agreement, the              
          Corporation assigned the accounts receivable without recourse.              
               Prior to the assignment, the Corporation did not attempt to            
          obtain an exemption for the transfer with the Department of Labor           
          (DOL).  Thereafter, the Corporation never replaced the accounts             
          receivable assigned to the Plan with cash.  While Dorothy Salata            
          was authorized on behalf of the Plan to collect the transferred             
          accounts receivable, there was no evidence presented regarding              
          the amount, if any, of actual collections.                                  
               With respect to the transfer of accounts receivable to the             
          Plan, no one with the Corporation or the Plan ever filed with               
          respondent a Form 5330, Return of Excise Taxes Related to                   
          Employee Benefit Plans.                                                     

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