Neil M. Baizer - Page 16

               While section 4975 and its corresponding regulations first             
          look to a rescission of the transaction, a correction may                   
          nevertheless occur even when a rescission is not possible.  See             
          sec. 53.4941(e)-1(c)(3), Foundation Excise Tax Regs.  For                   
          example, the transaction could have been "undone" by the Plan's             
          collection of the assigned accounts receivable.  In collecting              
          the accounts, the Plan would have had cash, which does not have             
          the same potential for abuse as the accounts receivable.                    
          Petitioner offered no evidence regarding the collection of the              
          accounts receivable.  The parties stipulated that Dorothy Salata            
          was employed by the Plan to collect the transferred accounts                
          receivable.  However, there was no evidence submitted to                    
          determine any amounts actually collected on the $273,558 accounts           
               Petitioner argues that each participant was paid in full               
          with the lump-sum equivalent of the participant's benefits, and             
          thus, there was a correction.  According to petitioner, any                 
          payments to the Plan would result in a refund to the corporation,           
          since the plan participants, Harold Breslow and Robert Levine,              
          received their full benefit and petitioner signed an irrevocable            
          waiver of his rights to Plan benefits.                                      
               We reject petitioner's argument.  Examining the record, we             
          find no documentary evidence that all rank and file employees               
          were paid their full vested interest, especially in light of Mr.            
          Levine's testimony that he did not receive the full present value           

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