- 64 -
Respondent determined primarily that the contributions were not
deductible under section 162(a). Respondent determined
alternatively that the contributions were not deductible under
section 404(a)(5); respondent determined that the Marlton Plan
was not a “welfare benefit fund” under section 419(e) but a
nonqualified plan of deferred compensation subject to the rules
of section 404. Respondent determined as a second alternative
that, assuming that the Marlton Plan is a “welfare benefit fund”,
any deduction of the contributions was precluded by section 419;
for this purpose, respondent determined that the NJ VEBA was not
a “10-or-more employer plan” under section 419A(f)(6) as asserted
by petitioners. Respondent determined as a third alternative
that any deduction of the contributions was precluded by section
264(a); for this purpose, respondent determined that each life
insurance policy issued under the Marlton Plan covered the life
of a person financially interested in Dr. Lo’s trade or business
and that Dr. Lo was directly or indirectly a beneficiary under
the policy.
OPINION
We must determine the tax consequences flowing from the
subject VEBA’s, which, petitioners claim, are “10-or-more
employer plans” entitled to the favorable tax treatment set forth
Page: Previous 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 NextLast modified: May 25, 2011