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Petitioner has pointed to several other provisions of the
Code that require assets to be “set aside” as examples of
language that Congress would have used if it had intended for the
set-aside of assets. See secs. 419A(d)(1), 512(a)(3)(E). In an
analogous context in General Signal Corp. & Subs. v.
Commissioner, supra at 244, we stated:
However, if the language of section 419A(c)(2) is read
to require the creation of a reserve funded with
general assets rather than segregated assets, the
language of these other provisions would not have been
appropriate. More importantly, this argument is simply
not sufficient to overcome the unambiguous statements
of the legislative history regarding the accumulation
of assets and the funding of benefits.
The same analysis and conclusion apply here.
Although section 419A(c)(1) does not use the term “reserve”,
in order for a taxpayer to be entitled to a deduction, the assets
must be set aside. An interpretation that the requirements of
section 419A are purely computational would ignore the
legislative history of section 419A, which states, in part:
the conferees wish to emphasize that the principal
purpose of this provision of the bill is to prevent
employers from taking premature deductions, for
expenses which have not yet been incurred, by
interposing an intermediary organization which holds
assets which are used to provide benefits to the
employees of the employer. * * * [H. Conf. Rept.
98-861, at 1155 (1984), 1984-3 C.B. (Vol. 2) 1, 409
(1984).]
Petitioner has ignored this requirement and has focused instead
on the reasonableness of the amount of the contribution for
long-term disability.
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