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of related administrative costs) for the VEBA Trust year ended
November 30, 1986, and $11,193,974 (plus $731,907 of related
administrative costs) for the VEBA Trust year ended November 30,
1987. The parties have stipulated that the additions to the
account limit for CIBU's, if not based on the safe harbor limits,
are $7,619,925 (plus $395,683 of related administrative costs)
and $5,290,729 (plus $261,232 of related administrative costs)
for the VEBA Trust years ended November 30, 1986 and 1987,
respectively.
Petitioner contends that the phrase in section 419A(c)(1)
"Except as otherwise provided in this subsection" means that
any other provision, i.e., section 419A(c)(5), is outside of, and
not subject to, the general requirement of section 419A(c)(1).
Accordingly, petitioner contends that, because section 419A(c)(5)
does not require that the account limit be reasonable, no such
requirement exists. Petitioner also argues that the safe harbor
limits allow taxpayers to avoid the burden of demonstrating that
additions to the account limit are reasonable, because the only
way to show reasonableness would be to obtain an actuarial
certification.
We disagree with petitioner. Although Congress sought to
reduce the cost of compliance by allowing certain additions to
the account limit to be made without having to incur the cost of
obtaining actuarial certification, a taxpayer must still show
that the additions to the account limit for CIBU's during the tax
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