-10-
exchange" to include the transfer of property in satisfaction of
such a monetary obligation. Id. at 158-159. Furthermore, the
Court noted that section 4975(c)(1)(A) not only barred a "sale or
exchange" but also "any direct or indirect * * * sale or
exchange." Id. at 159. The Court concluded that "The
contribution of property in satisfaction of a funding obligation
is at least both an indirect type of sale and a form of exchange,
since the property is exchanged for diminution of the employer's
funding obligation." Id.
In this case the record shows that the Corporation was
indebted to the Plan. For the plan year ended January 31, 1984,
the Corporation was required to contribute $186,200 to the Plan
to satisfy the minimum funding standard of section 412. The
Corporation created two fictitious notes receivable from "H.
Bogart" and then claimed a deduction of $186,200 on its corporate
income tax return for its taxable year ended January 31, 1985.
However, as of January 31, 1988, the Corporation had not made the
1984 mandatory contribution. Later in 1988, the Corporation
assigned $273,558 of its accounts receivable for the purpose of
satisfying the Corporation's funding obligation under section
412. The assignment was implemented through two documents,
signed by both Mr. Cohen and petitioner, dated May 31, 1988:
"Agreement" and "Assignment of Accounts Receivable". Through the
assignment of accounts receivable, the Corporation sought to be
relieved of its funding obligation to the Plan.
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