- 18 - At the outset, this Court explained that "We have traditionally analyzed the deductibility of an employer's contributions to a welfare benefit plan by taking into consideration, among other things, both the degree of control which an employer retains over the plan and the degree to which the employees, as opposed to the employer, are benefited." Schneider v. Commissioner, supra; see also Weil Clothing Co. v. Commissioner, 13 T.C. 873, 879-880 (1949). Regarding the first consideration, we stated that in the context of an employee benefit plan, an employer does not necessarily retain too much control when it retains the right to terminate or alter the plan, so long as the funds in the plan may never revert to or inure to the benefit of the employer. Schneider v. Commissioner, supra. Similarly, concerning the second consideration, we stated that the employer's contributions must directly benefit its employees rather than the employer.11 With respect to taxpayer contributions that produce future benefits for the taxpayer, we stated: if an expenditure results in a substantial benefit to the taxpayer, as distinguished from an incidental benefit, which can be expected to produce returns to 11See Anesthesia Serv. Medical Group, Inc. v. Commissioner, 85 T.C. 1031, 1044-1045 (1985), affd. 825 F.2d 241 (9th Cir. 1987) (holding that a trust established to provide protection against the malpractice claims of the employer's physician- employees was concerned primarily with the interests of the employer, which was jointly and severally liable for the negligence of its employees).Page: Previous 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Next
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