American Stores Company and Subsidiaries - Page 15

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          year is an amount which the plan administrator could have, as of            
          the beginning of such plan year, reasonably anticipated to be               
          made by employers with respect to covered services performed                
          during such plan year.                                                      
               Petitioner consulted with an accounting firm, Ernst &                  
          Whinney, about accelerating deductions for contributions to the             
          CBA Plans made after the end of a tax year and before the due               
          date of the tax return for that year (herein for convenience                
          referred to as grace period contributions).  The parties                    
          stipulated that Ernst & Whinney marketed this type of                       
          acceleration to certain clients that were making required                   
          contributions to multiemployer defined benefit pension plans                
          during this period.                                                         
               Petitioner was never notified by any plan representative               
          that the statutory deduction limit was exceeded with respect to             
          any plan for any relevant period.  Petitioner did not notify any            
          plan representative that the monthly contributions calculated               
          with reference to covered services performed after January 31,              
          1988, were to be applied to months ending on or before January              
          31, 1988.                                                                   
          II.  The Vacation Pay Deductions                                            
               Petitioner provides many of its approximately 130,000                  
          employees with job-related benefits, including vacation pay and             

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Last modified: May 25, 2011