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Matthew J. Zinn, J. Walker Johnson, and Tracy L. Rich,
for petitioner.
Jill A. Frisch and Randall P. Andreozzi, for respondent.
RUWE, Judge: Respondent determined a deficiency of
$7,372,712 in petitioner’s 1985 Federal income tax. The sole
issue for decision is whether petitioner is entitled to a 1985
deduction for its $20 million contribution to a voluntary
employees’ beneficiary association (VEBA) trust. In order to
prevail, petitioner must establish that the $20 million
contribution was an ordinary and necessary business expense under
section 162(a).1
FINDINGS OF FACT
Some of the facts have been stipulated and are so found.
The stipulation of facts is incorporated herein by this
reference. At the time its petition was filed, petitioner
maintained its principal office in Hartford, Connecticut.
During all relevant periods, petitioner was a mutual life
insurance corporation subject to tax under the provisions of
sections 801-818. Petitioner filed its Federal income tax
1Unless otherwise indicated, all section references are to
the Internal Revenue Code in effect for the taxable year in
issue, and all Rule references are to the Tax Court Rules of
Practice and Procedure.
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