T.C. Memo. 2004-260
UNITED STATES TAX COURT
JOSEPH R. ROLLINS, Petitioner v.
COMMISSIONER OF INTERNAL REVENUE, Respondent
Docket No. 598-03. Filed November 15, 2004.
P caused the 401(k) plan of his wholly owned company to
lend money to three entities in which P owned minority
interests. P’s company is the sole trustee of, and the
administrator of, the 401(k) plan. P also acted on the part
of the borrower entities in agreeing to the loans.
1. Held: Each of the loans was a “prohibited
transaction” within the meaning of sec. 4975(c)(1)(D),
I.R.C. 1986. P, a disqualified person, is liable for
excise taxes under sec. 4975(a) and (b), I.R.C. 1986;
amounts to be determined.
2. Held, further, P is liable for additions to tax
under sec. 6651(a)(1), I.R.C. 1986, for failure to file
excise tax returns; amounts to be determined.
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