Neil M. Baizer - Page 24

          hand, the tax provisions of section 4975 impose a two-tier excise           
          tax on the disqualified person who participated in the prohibited           
          transaction.  See Rutland v. Commissioner, 89 T.C. at 1146.                 
          Under the Reorganization Plan, the IRS retained its authority to            
          enforce the excise tax of section 4975, and the DOL retained its            
          authority to bring civil actions.  Reorg. Plan secs. 104 and 105.           
               Considering the role established in Reorganization Plan                
          sections 102 and 105 and the legislative history, we hold that              
          the DOL does not have sole jurisdiction to determine whether a              
          prohibited transaction occurred.  The Code and ERISA provide that           
          the IRS must notify the DOL before issuing the notice of                    
          deficiency and afford the DOL an opportunity to comment on the              
          imposition of the tax, but they do not require that the notice of           
          deficiency be based on a the DOL determination that the                     
          transaction was a prohibited transaction under section                      
          4975(c)(1)(A).  In order to enforce the excise taxes under                  
          section 4975(a) and (b), respondent has the authority to                    
          determine whether a transaction is a prohibited transaction under           
          section 4975(c)(1) and respondent duly exercised that authority             
          in this case.  See Reorg. Plan sec. 102(a)(i) and (ii).                     

          H. Conf. Rept. 93-1280, at 295-296 (1974), 1974-3 C.B. 415, 456-            

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