- 15 -
Petitioner never notified any of the labor unions, or
representatives thereof, that represented employees of petitioner
or its subsidiaries of the existence of the VEBA Trust,
petitioner’s contribution to the VEBA Trust, or the existence of
any reserves of the VEBA Trust. Petitioner never notified any of
its employees or retirees of the existence of the VEBA Trust,
petitioner’s 1987 contribution to the VEBA Trust, or the
existence of any reserves of the VEBA Trust, except for
petitioner’s employees who were involved in the implementation of
the VEBA Trust. Petitioner never disclosed the existence of the
VEBA Trust or any reserves of the VEBA Trust on any of the
summary plan descriptions provided by petitioner to its employees
to notify them of its pension and retirement plans.
Petitioner made no specific disclosure to its shareholders
or the public that it prefunded the VEBA Trust. Petitioner
disclosed to its shareholders and to the public the prefunding of
certain future employee benefits under the heading “Other” in
petitioner’s Annual Reports for 1987, 1988, and 1989. The
explanation of "Other" in petitioner's 1987 Annual Report stated:
Other increases in assets included an increase in
"Prepaid expenses" and "Investment in joint ventures
and other assets" as a result of prefunding certain
future employee benefits. "Excess cost of investments"
increased primarily as a result of the acquisition of
United Aircraft Products, Inc.
On its Form 1120 for 1987, petitioner deducted the full
amount of the 1987 contribution to the VEBA Trust. Petitioner
also claimed a deduction on its 1987 return for the actual cost
Page: Previous 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 NextLast modified: May 25, 2011