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Center (Marlton) group. The Marlton group relates to the Marlton
Employee Welfare Plan (Marlton Plan), a purported welfare benefit
fund formed under the NJ VEBA.4
In regard to each test case, respondent determined that the
employer or sole proprietor could not deduct its or his
contributions to the respective plan and, in the case of
Neonatology and Lakewood, that the employee/owners had income to
the extent that he or she benefited from a contribution.5
Respondent determined that each petitioner was liable for
deficiencies in Federal income tax as a result of the VEBA
determinations and that each petitioner was liable for a related
accuracy-related penalty under section 6662(a) for negligence or
intentional disregard of rules or regulations. In the case of
Lakewood, respondent also determined that it was liable for a 15-
percent addition to tax under section 6651(a) for failure to file
timely its 1992 Federal income tax return and a section 6621
increased rate of interest on its 1991 deficiency as to interest
accruing after July 20, 1995.
Each petitioner petitioned the Court to redetermine
respondent’s determinations. Respondent’s notices of deficiency
4 We do not decide whether this plan is a welfare benefit
fund under sec. 419(e).
5 Respondent also made certain other adjustments of income
and expense. Petitioners concede these adjustments, unless they
are mathematical computations relating to the VEBA issues.
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