-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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