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Leasing, Inc. v. Commissioner, 89 T.C. 225, 230 (1987), affd. 862
F.2d 751 (9th Cir. 1988). In determining whether a plan is
qualified under section 401(a), the operation of the trust is
relevant as are its terms. See Winger's Depart. Store, Inc. v.
Commissioner, 82 T.C. 869, 876 (1984); Quality Brands, Inc. v.
Commissioner, 67 T.C. 167, 174 (1976); see also sec. 1.401-
1(b)(3), Income Tax Regs.
Section 401(a)(2)10 provides that for a trust forming part
of an employer's pension plan to be exempt, it must be
impossible, at any time before the satisfaction of all
liabilities with respect to the employer's employees and their
beneficiaries under the trust, for any part of the corpus or
income to be used for, or diverted to, purposes other than for
the exclusive benefit of those employees or beneficiaries.
10Sec. 401(a) provides, in pertinent part, as follows:
SEC. 401(a). Requirements for Qualification.--A trust
created or organized in the United States and forming part
of a stock bonus, pension, or profit-sharing plan of an
employer for the exclusive benefit of his employees or their
beneficiaries shall constitute a qualified trust under this
section--
* * * * * * *
(2) if under the trust instrument it is
impossible, at any time prior to the satisfaction of
all liabilities with respect to employees and their
beneficiaries under the trust, for any part of the
corpus or income to be * * * used for, or diverted to,
purposes other than for the exclusive benefit of his
employees or their beneficiaries * * *
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