Sherwin-Williams Company Employee Health Plan Trust - Page 9




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          burden of establishing that its position is correct.  See Rule              
          142(a); Welch v. Helvering, 290 U.S. 111, 115 (1933).                       
               Before addressing the issues presented, we set forth the               
          pertinent statutory provisions implicated by those issues.12                
          Although section 501(a) exempts a VEBA from tax, section 501(b)             
          subjects a tax-exempt VEBA to tax to the extent provided in                 
          sections 511 through 515 relating to the tax on UBTI.  Section              
          511(a) imposes a tax for each taxable year on the UBTI of a VEBA,           
          as defined in section 512.                                                  
               Section 512(a)(1) provides the following general definition            
          of UBTI:                                                                    
                    (1) General rule.–-Except as otherwise provided in                
               this subsection, the term “unrelated business taxable                  
               income” means the gross income derived by any organiza-                
               tion from any unrelated trade or business (as defined                  
               in section 513) regularly carried on by it, less the                   
               deductions allowed by this chapter which are directly                  
               connected with the carrying on of such trade or busi-                  
               ness, both computed with the modifications provided in                 
               subsection (b).                                                        
               Section 512(a)(3) provides the following special rules in              
          defining the UBTI of a VEBA described in section 501(c)(9):                 
                    (3) Special rules applicable to organizations                     
               described in paragraph (7), (9), (17), or (20) of                      
               section 501(c).--                                                      


               11(...continued)                                                       
          determinations.                                                             
               12Although the statutory provisions set forth below apply              
          not only to a VEBA but also to certain other organizations, our             
          discussion generally is limited to the application of those                 
          provisions to a VEBA.                                                       





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