- 3 - Unless otherwise indicated, all section references are to the Internal Revenue Code in effect for the years in issue, and all Rule references are to the Tax Court Rules of Practice and Procedure. The issues for decision are as follows: 1. Does section 4975 apply to a loan even though such loan, pursuant to section 72(p), was treated as a distribution? We hold that it does. 2. Did petitioners, within the meaning of section 4975(f)(5), correct the prohibited transaction? We hold that they did not. 3. What is the "amount involved" relating to a loan that is subject to section 4975 excise taxes? We hold that the "amount involved" is the greater of the interest paid or the fair market interest. 4. In determining the "amount involved" relating to petitioners' loan, what is the fair market interest rate? We hold that the fair market interest rate is 10.5 percent. 5. Are petitioners, pursuant to section 6651(a), liable for additions to tax for failing to file excise tax returns? We hold that they are. Background The parties submitted this case fully stipulated pursuant to Rule 122. At the time the petition was filed, petitioners resided in Niles, Michigan.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 Next
Last modified: May 25, 2011