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Greenstein, Scheer, and the plan. The claims of Sklar,
Greenstein, and Scheer accounted for 85 percent of the recovery
in this case, and a portion of the legal expenses incurred in
1993 was allocable to their claims. To the extent petitioner
paid any portion of the litigation costs allocable to Sklar,
Greenstein, or Scheer, petitioner paid the expenses of other
taxpayers, and such expenses were not incurred in connection with
the plan. Petitioner paid its own expenses only to the extent
that the litigation costs were allocable to the plan. See George
R. Holswade, M.D., P.C. v. Commissioner, 82 T.C. 686, 699-701
(1984) (rejecting respondent's claim that an employer's payment
of a plan-related expense was the payment of another's expense).
The claimants allocated the settlement proceeds and
remaining unpaid legal fees in accordance with a collection
factor. Neither party has suggested that this allocation was
disproportionate or improper, and we find the allocation
percentages reasonable. Of the $239,717 in litigation costs
incurred in 1993, 15 percent (the plan's collection factor) or
$35,957 is allocable to petitioner, and the remaining $203,760 is
allocable to Sklar, Greenstein, and Scheer. We hold petitioner
may deduct the $35,957 allocable to the plan.
The remaining $61,317 in litigation costs paid ($97,274-
$35,957) is allocable to Sklar, Greenstein, and Scheer. This
stipulated record contains no evidence from which we can find
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