Parker-Hannifin Corporation - Page 27

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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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