- 26 -
taking premature deductions, for expenses which have
not yet been incurred". * * * [General Signal Corp. &
Subs. v. Commissioner, supra at 243-244; emphasis
added.]
In both General Signal and Parker-Hannifin Corp., we found that
no reserve had been created, obviating the need to consider
whether the contributions were excessive from an actuarial
standpoint.
In General Signal, we stated that the phrase "reserve
funded", on its face, "suggests that Congress intended this
provision to allow the accumulation of funds by a welfare benefit
fund for the purpose of providing postretirement benefits."
General Signal Corp. & Subs. v. Commissioner, 103 T.C. at 239.
Where a statute is ambiguous we may look to its legislative
history and to the reason for its enactment. United States v.
American Trucking Associations, 310 U.S. 534, 543-544 (1940);
U.S. Padding Corp. v. Commissioner, 88 T.C. 177, 184 (1987),
affd. 865 F.2d 750 (6th Cir. 1989). In General Signal, in light
of the taxpayer's assertions that the phrase "reserve funded"
does not have a commonly understood meaning, we assumed arguendo
that the phrase was ambiguous and considered the legislative
history. General Signal Corp. & Subs. v. Commissioner, supra at
240.
The relevant portion of the committee report states:
Prefunding of life insurance, death benefits, or
medical benefits for retirees.--The qualified asset account
limits allow amounts reasonably necessary to accumulate
reserves under a welfare benefit plan so that the medical
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