Section 4975 Of The Code

The rate of tax shall be equal to 15 percent of the amount involved with respect to the prohibited transaction for each year or part thereof in the taxable period.

Section 4975 of the code. 4975 a initial taxes on disqualified person. If the secretary of labor determines under subparagraph b that there is no computer model investment advice program described in subparagraph b the secretary of labor shall grant a class exemption from treatment as a prohibited transaction under section 4975 c of the internal revenue code of 1986 to any transaction described in section 4975 d 17 a of such code with respect to plans described in subparagraph a i subject to such conditions as set forth in such exemption as are in. There is hereby imposed a tax on each prohibited transaction.

Avoiding disqualified persons and prohibited transactions. Tax on prohibited transactions. For more detailed codes research information including annotations and citations please visit westlaw.

The standard rule under irc section 4975 a is that if a prohibited transaction occurs there is a penalty tax of 15 of the amount involved in the transaction imposed on any disqualified person engaged in the prohibited transaction. And if the prohibited transaction isn t promptly unwound corrected within the current tax year the penalty tax is increased to 100 of the transaction amount. Tax on prohibited transactions on westlaw.

Internal revenue code 4975.