978
PUBLIC LAW 93-406-SEPT. 2, 1974
[88 STAT.
" (h) NOTIFICATION OF SECRETARY OF LABOR.—Before sending a notice of deficiency with respect to the tax imposed by subsection (a) or (b), the Secretary or his delegate shall notify the Secretary of Labor and provide him a reasonable opportunity to obtain a correction of the prohibited transaction or to comment on the imposition of such tax. " (i) CROSS KEFERENCE.— "For provisions concerning coordination procedures between Secretary of Labor and Secretary of Treasury with respect to application of tax imposed by this section and for authority to waive imposition of the tax imposed by subsection (b), see section 3003 of the Employee Retirement Income Security Act of 1974.". 26 USC 503.
26 USC 4975 note.
Anfe, p. 935. 26 USC 501,
Ante, p. 971.
Regulations.
(b) AMENDMENT OF SECTION 503.—Section 503 (relating to requirements for exemption) is amended— (1) by striking out "or (18)" in subsection (a)(1)(A), (2) by amending subsection (a)(1)(B) by inserting "which is referred to in section 4975(g)(2) or (3) " after "described in section 401(a) ", (3) by striking out "or section 401" in subsection (a)(2) and inserting in lieu thereof "or paragraph (1)(B) ", (4) by striking out "or section 401" in subsection (c) and inserting in lieu thereof "or subsection (a)(1)(B) ", and (5) by striking out subsection (g). (c) EFFECTIVE DATE AND SAVINGS PROVISIONS.—
(1)(A) The amendments made by this section shall take effect on January 1, 1975. (B) If, before the amendments made by this section take effect, an organization described in section 401(a) of the Internal Revenue Codc of 1954 is denied exemption under section 501(a) of such Code by reason of section 503 of such Code, the denial of such exemption shall not apply if the disqualified person elects (in such manner and at such time as the Secretary or his delegate shall by regulations prescribe) to pay, with respect to the prohibited transaction (within the meaning of section 503(b) or (g)) which resulted in such denial of exemption, a tax in the amount and in the manner provided with respect to the tax imposed under section 4975 of such Code. An election made under ^j^jg Subparagraph, once made, shall be irrevocable. The Secretary of the Treasury or his delegate shall prescribe such regulations as may be necessary to carry out the purposes of this subparagraph. (2) Section 4975 of the Internal Revenue Code of 1954 (relating to tax on prohibited transactions) shall not apply to— (A) a loan of money or other extension of credit between a plan and a disqualified person under a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), until June 30, 1984, if such loan or other extension of credit remains at least as favorable to the plan as an arm'slength transaction with an unrelated party would be, and if the execution of the contract, the making of the loan, or the extension of credit was not, at the time of such execution, making, or extension, a prohibited transaction (within the meaning of section 503(b) of such Code or the corresponding provisions of prior law); (B) a lease or joint use of property involving the plan and a disqualified person pursuant to a binding contract in effect on July 1, 1974 (or pursuant to renewals of such a contract), until June 30, 1984, if such lease or joint use remains at least as favorable to the plan as an arm's-length transaction with an unrelated party would be and if the execution of the contract was not, at the time of such execution, a prohibited
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