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I. Loans
Petitioner took unsecured loans, each bearing 12 percent
annual interest and a due date of January 1, 1992, from the plan
as follows:
Date Amount
Mar. 1, 1988 $62,000
Mar. 7, 1988 20,000
Apr. 16, 1990 10,000
Apr. 19, 1990 100,000
Apr. 20, 1990 6,000
Apr. 30, 1990 6,000
May 19, 1990 6,500
The plan allowed loans to participants but limited the amount of
any loan, required a Qualified Waiver of Spouse from the
participant taking the loan, and stipulated that the loan be
secured by the participant’s entire interest in the plan’s trust
fund. Petitioner’s loans were made in excess of the plan’s
amount limitations and without a Qualified Waiver of Spouse.
Petitioner partially repaid the May 19, 1990, loan, but did not
make any other repayments or file Form 5330, Return of Excise
Taxes Related to Employee Benefit Plans.
II. Other Cases
On November 2, 1990, the company filed a voluntary petition
for reorganization under chapter 11 of the Bankruptcy Code (the
bankruptcy case). In the bankruptcy case, the Commissioner
asserted a section 4971 deficiency against the company for
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