- 17 -
necessary business expenses pursuant to section 162(a). Our
review of the plan documents in question indicated that the
reversion of any assets from the VEBA was clearly prohibited.
Finally, in Moser v. Commissioner, supra, we disagreed with
the Commissioner's argument that the corporation's contribution
was excessive, and, therefore, the corporation should not be
allowed a deduction for the full amount. The corporation's
$200,000 contribution was based on calculations made by a
financial consultant to ascertain the full amount of all
potential severance benefits and the life insurance and medical
insurance premiums that were necessary to fund death, disability,
and accident benefits for 1 year. We found that the
corporation's original $200,000 contribution had "provided for
full funding of the severance benefits and generated income
sufficient to fund the annual costs of providing VEBA benefits -
no more, no less." Moser v. Commissioner, supra.
In Schneider v. Commissioner, T.C. Memo. 1992-24, we held
that a personal service corporation was entitled to deduct
contributions made to three employee welfare benefit plans
established to provide death, disability, and termination
benefits to employees and educational benefits to the children of
eligible employees. The Commissioner argued that the
contributions at issue were capital expenditures because they
created a benefit for the taxpayer that lasted substantially
beyond the taxable year in which the contributions were made.
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