-6-
By letter dated December 6, 1991, the IRS notified the DOL
about its intent to disqualify the Plan for failing to satisfy
the exclusive benefit rule of section 401(a). At this time, the
DOL was pursuing ERISA title I remedies against the Plan. In
February 1993, petitioner (individually and as trustee of the
Plan) and the estate of Mr. Cohen entered into a "Stipulation for
Consent Judgment: Judgment" (Consent Judgment) with the DOL. By
consenting to the Consent Judgment, "The parties have agreed to
the entry of this judgment as final adjudication of all claims,
obligations, penalties and remedies of the * * * [DOL] related to
the allegations in the complaint, without admitting or denying
any of the allegations contained therein." Further, the Consent
Judgment provided that "The obligations imposed by this Judgment
are not binding on any government agency other than the United
States Department of Labor."
On August 18, 1994, respondent issued a notice of deficiency
to petitioner, in the amounts set forth above, determining excise
tax deficiencies pursuant to section 4975(a) and (b), as well as
additions to tax. Respondent determined that petitioner was a
"disqualified person" and that he had participated in a
prohibited transaction under section 4975(c).
OPINION
We begin by noting that, as a general rule, the
Commissioner's determinations are presumed correct, and the
taxpayer bears the burden of proving otherwise. Rule 142(a);
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