Neil M. Baizer - Page 25

               Effect of the Consent Judgment                                         
               Petitioner contends that the Consent Judgment was tantamount           
          to a ruling, opinion, or exemption issued pursuant to authority             
          that was delegated solely to the DOL under Reorganization Plan              
          section 102.  As a result, petitioner argues that the IRS "cannot           
          come to a conclusion concerning a prohibited transaction contrary           
          to a ruling previously made by the DOL."                                    
               Reorganization Plan section 102 gives the DOL the authority            
          to issue "rulings, opinions, and exemptions".  Reorganization               
          Plan section 105 provides that in enforcing the excise tax                  
          provisions the IRS is bound, "to the extent applicable," by the             
          regulations, rulings, opinions, and exemptions issued by the DOL            
          as provided in Reorganization Plan sections 102 and 105.                    
               In December 1991, the IRS notified the DOL about its intent            
          to disqualify the Plan.  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 the Consent Judgment with the DOL.  Paragraph            
          10 of the Judgment specifically provides that "The obligations              
          imposed by this Judgment are not binding on any Government agency           
          other than the United States Department of Labor."  In August               
          1994, respondent issued to petitioner a notice of deficiency                
          determining an excise tax.                                                  
               Petitioner states that the DOL concluded that a prohibited             
          transaction had not occurred (a "non-violation" according to                

Page:  Previous  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22  23  24  25  26  27  Next

Last modified: May 25, 2011