Edward Clasby and C.T. Garrahan Insurance Agency, Inc. - Page 10




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          on the committee.                                                           
               Neither petitioner nor the Garrahan Agency filed a Form                
          5330, Return of Excise Tax Related to Employee Benefit Plans, for           
          any of the years at issue.                                                  
          F.   Notices of Deficiency                                                  
               Respondent issued notices of deficiency determining that               
          petitioners are liable for excise tax deficiencies under section            
          4975(a) and (b) and additions to tax under section 6651(a)(1) for           
          1982 through 1993.  Respondent determined that petitioners were             
          "disqualified persons" and that they had participated in                    
          prohibited transactions under section 4975(c).                              
                                    II.  OPINION                                      
          A.   Excise Tax on Prohibited Transactions                                  
               Section 4975(a) imposes an excise tax on prohibited                    
          transactions between retirement plans and disqualified persons.             
          Section 4975(a) imposes a 5-percent tax on the amount involved,             
          as defined by section 4975(f)(4), for each prohibited                       
          transaction.  Any disqualified person who participates in a                 
          prohibited transaction is liable for the tax.  Sec. 4975(a).  A             














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