- 2 -
2. Held, further, P's CIBU's for 1986 and 1987
are based upon stipulated percentages of its qualified
direct costs for each year. See sec. 419A(c)(1), (5),
I.R.C.
3. Held, further, the creation of a reserve under
sec. 419A(c)(2), I.R.C., requires the accumulation of
assets and does not result from the accrual of a
liability. General Signal Corp. & Subs v.
Commissioner, supra, followed.
4. Held, further, because P's contributions to
its VEBA during 1986 did not result in the creation of
a reserve for postretirement medical benefits for its
employees, P is not entitled to an increase in its
account limit for 1986 pursuant to sec. 419A(c)(2),
I.R.C., with respect to that year.
5. Held, further, the limit of sec. 1.419-1T,
Q&A-5(b)(1), Temporary Income Tax Regs., 51 Fed. Reg.
4324 (Feb. 4, 1986), is valid.
Robert H. Aland, Gregg Douglas Lemein, Taylor S. Reid,
Tamara L. Frantzen, Maura Ann McBreen, and Brian K. Wydajewski,
for petitioner in docket No. 15047-94.
Robert H. Aland, Gregg Douglas Lemein, Neal J. Block,
Frederick Edward Henry III, Maura Ann McBreen, Tamara L.
Frantzen, Taylor S. Reid, Brett L. Gold, and Brian K. Wydajewski,
for petitioner in docket No. 4991-95.
Lawrence C. Letkewicz and Randall P. Andreozzi, for
respondent.
OPINION
WELLS, Chief Judge: The instant cases were consolidated for
purposes of trial, briefing, and opinion (hereinafter referred to
as the instant case). The instant case is before the Court on
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