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During the relevant period, petitioner's subsidiaries made
monthly contributions to 39 CBA Plans on behalf of their
unionized employees. For each CBA Plan, the amount of the
monthly contribution was obtained by multiplying the units of
service worked by employees covered under the respective CBA Plan
by the contribution rate.
For each taxable year prior to TYE 8801, petitioner deducted
12 monthly contributions based on covered hours worked during
such year. Then, as to TYE 8801, petitioner changed its method
of calculating its deduction. For that year, petitioner obtained
an extension to October 17, 1988, of the time within which to
file its return. Between the date on which TYE 8801 ended and
the extended due date of the return, petitioner's subsidiaries
made 7 or in some cases 8 monthly contributions to the CBA Plans,
and claimed these grace period contributions as a deduction for
TYE 8801, in addition to the 12 monthly contributions.
Section 404(a) specifies that employer contributions to
exempt trusts under various types of qualified employee benefit
plans are not deductible under any other Code provision, but if
they would otherwise be deductible, they are deductible under
section 404, subject to articulated limitations as to the amount
deductible in any taxable year. The limitations on the amount
deductible are contained in section 404(a)(1)(A), which also
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