- 26 -
person in petitioner's shoes could have concluded that excise
tax returns were not required for those years. The law
governing a transfer of unencumbered property to a pension plan
in satisfaction of a loan was, up until today, not squarely
addressed by a court, and we believe that a reasonable person
could have concluded on the basis of existing case law that an
excise tax return was not required in such a situation. We
also take into account Zabolotny and the issue of whether a
prohibited transaction can correct itself absent an affirmative
act of rescission. Although we held in that case that the
prohibited transaction could not correct itself without
rescission, our decision was reversed upon appeal. The Court
of Appeals concluded that section 4975 applied only to the
first year in issue because the transaction self-corrected.
We conclude that a reasonable person in the position of
petitioner as of the respective due dates of the 1992 through
1996 excise tax returns could have concluded that the relevant
transfer was not a prohibited transaction, or, if it was, that
it had been corrected earlier.
We have carefully considered all remaining arguments made
by the parties for holdings contrary to those expressed herein,
and, to the extent not discussed above, find them to be
irrelevant or without merit.
To reflect the foregoing,
Page: Previous 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 NextLast modified: May 25, 2011