Page:United States Statutes at Large Volume 88 Part 1.djvu/1015

 88 STAT. ]

PUBLIC LAW 93-406-SEPT. 2, 1974

971

(4) The table of sections for subchapter B of chapter 68 is amended by adding at the end thereof the following new item: "Sec. 6693. Failure to provide reports on individual accounts or annuities.".

retirement

(i) EFFECTIVE D A T E S. —

26

219

(1) The amendments made by subsections (a), (b), and (c) note, use apply to taxable years beginning after December 31, 1974. 26 (2) The amendments made by subsections (d) through (h) note, use 4973 except subsection (g)(5) and (6) shall take effect on January 1, 1975. 26 (3) The amendments made by subsection (g)(5) and (6) note, use 4 02 shall apply on and after the date of enactment of this Act with respect to contributions to an employees' trust described in section 401(a) of the Internal Revenue Code of 1954 which is exempt from tax under section 501(a) of such Code or an annuity plan described in section 403(a) of such Code.

SEC. 2003. PROHIBITED TRANSACTIONS. (a) EXCISE TAX ON PROHIBITED TRANSACTIONS.—Chapter 43 (relat-

ing to qualified pension, etc., plans) is amended by adding after section 4974 the following new section: "SEC. 4975. TAX ON PROHIBITED TRANSACTIONS. " (a) INITIAL TAXES ON DISQUALIFIED PERSON.—There is hereby

imposed a tax on each prohibited transaction. The rate of tax shall be equal to 5 percent of the amount involved with respect to the prohibited transaction for each year (or part thereof) in the taxable period. The tax imposed by this subsection shall be paid by any disqualified person who participates in the prohibited transaction (other than a fiduciary acting only as such). " (b) ADDITIONAL TAXES ON DISQUALIFIED PERSON.—In any case in which an initial tax is imposed by subsection (a) on a prohibited transaction and the transaction is not corrected within the correction period, there is hereby imposed a tax equal to 100 percent of the amount involved. The tax imposed by this subsection shall be paid by any disqualified person who participated in the prohibited transaction (other than a fiduciary acting only as such). " (c) PROHIBITED TRANSACTION.— "(1) GENERAL RULE.—For purposes of this section, the term

'prohibited transaction' means any direct or indirect— " (A) sale or exchange, or leasing, of any property between a plan and a disqualified person; " (B) lending of money or other extension of credit between a plan and a disqualified person; " (C) furnishing of goods, services, or facilities between a plan and a disqualified person; " (D) transfer to, or use by or for the benefit of, a disqualified person of the income or assets of a plan; " (E) act by a disqualified person who is a fiduciary whereby he deals with the income or assets of a plan in his own interest or for his own account; or " (F) receipt of any consideration for his own personal account by any disqualified person who is a fiduciary from any party dealing with the plan in connection with a transaction involving the income or assets of the plan. "(2) SPECIAL EXEMPTION.—The Secretary or his delegate shall establish an exemption procedure for purposes of this subsection. Pursuant to such procedure, he may grant a conditional or unconditional exemption of any disqualified person or transaction,

26 USC 4975.

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