Connecticut Mutual Life Insurance Company and Consolidated Subsidiaries - Page 18

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               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).                                               




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