Michael Morrissey - Page 12

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            he had been, in at least one prior case, a Court of Appeals has           
            held a beneficiary of a one-person pension plan liable under              
            section 4975.  See Wood v. Commissioner, 955 F.2d 908 (4th Cir.           
            1992).  Petitioner attempts to distinguish Wood by arguing that           
            the issue there related to a satisfaction of a funding                    
            obligation, whereas here he transferred the real estate to the            
            MPP in repayment of a loan.4  We do not believe that this bare            
            difference in fact leads to a different result.  The repayment            
            of a loan, like the honoring of a funding obligation, satisfies           
            a debt owed by the transferor.  We see no meaningful                      
            distinction that may be drawn from the fact that the obligation           
            in one case stems from a borrowing, whereas the obligation in             
            the other stems from a contractual promise to set aside a                 
            stated sum of money for the benefit of plan participants.                 
            In both cases, a transfer is made to satisfy an obligation.               
            For present purposes, the former obligation is                            
            indistinguishable from the latter.                                        
                 The Congress' goal in enacting section 4975 "was to bar              
            categorically a transaction that was likely to injure the                 
            pension plan."  Commissioner v. Keystone Consol. Indus., Inc.,            


               4 Generally, any lending money between a plan and a                    
          disqualified person is a prohibited transaction.  Sec.                      
          4975(c)(1)(B).  Sec. 4975(d)(1), however, carves out an exception           
          in the case of certain loans that meet the criteria set forth               
          therein.  Respondent does not assert that petitioner's loans from           
          the Plans were outside this exception.                                      




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