Excise taxes may be imposed on parties to a prohibited transaction.

Yes. The ERISA prohibited transaction provisions focus on the fiduciary causing the plan to deal with a party in interest. In contrast, the excise taxes under the Code fall on the "disqualified person." Fiduciaries become subject to the excise tax only if they act in a prohibited transaction in a capacity other than that of a fiduciary, i.e., if they violate the prohibitions against self-dealing or conflicts of interest.

The tax on prohibited transactions is two-tiered. The Code automatically imposes an initial tax of 15% of the amount involved in the transaction on disqualified persons who participate in a prohibited transaction for each year or part of a year dating from the time the transaction occurred until the transaction is corrected or is subjected to a deficiency notice, or until the tax is assessed. The "amount involved" means the greater of the amount given or received, valuing any property involved at fair market value on the date of the transaction. "Correction" means undoing the transaction to the extent possible, but in any case placing the plan in a financial position no worse than if the disqualified person had acted under the highest fiduciary standards.

An additional tax equal to 100% of the amount involved (valued at the highest fair market value during the correction period) falls on the disqualified persons if the transaction remains uncorrected within the taxable period ending with the assessment or notice of deficiency with respect to the initial 15% tax. If the transaction is corrected within 90 days of the mailing of a notice of deficiency concerning this additional tax, the tax is abated or refunded.