- 3 -
the parties' cross-motions for partial summary judgment. We must
decide whether petitioner's contribution to its trust created as
part of its voluntary employees' beneficiary association (VEBA)
plan for the 1986 taxable year is deductible. Specifically, we
must decide: (1) Whether petitioner is entitled to the safe
harbor limits of section 419A(c)(5)(B)(i) and (ii)1 in computing
the addition to the qualified asset account for medical, dental,
and short-term disability (also referred to as accident and
sickness) benefit claims and associated administrative costs
pursuant to section 419A(c)(1); (2) whether petitioner's $27
million contribution to its VEBA trust during 1986 constituted "a
reserve funded over the working lives of the covered employees"
for postretirement medical benefits (PRMB's) within the meaning
of section 419A(c)(2); and (3) whether the limitation of section
1.419-1T, Q&A-5(b)(1), Temporary Income Tax Regs., 51 Fed. Reg.
4324 (Feb. 4, 1986), is valid.
Background
Some of the facts and certain exhibits have been stipulated
by the parties for the purpose of the instant motion. The
stipulation of facts is incorporated in this Opinion by
reference. When its petition was filed, petitioner's principal
office was located in Palatine, Illinois. Petitioner is a
1 All Code and section references are to the Internal Revenue
Code in effect for the year at issue. All Rule references are to
the Tax Court Rules of Practice and Procedure.
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
Last modified: May 25, 2011