Sherwin-Williams Company Employee Health Plan Trust - Page 13




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          Trustee that that amount of investment income for each year at              
          issue is not subject to that limitation.  That position rests               
          upon the contentions of the Trustee that the plain language of              
          section 512(a)(3)(B) identifies four independent sources or                 
          components of exempt function income and that one of those                  
          sources or components of exempt function income is reasonable               
          costs of administration directly connected with a purpose de-               
          scribed in section 512(a)(3)(B)(i) or (ii).  The Trustee posits             
          that the four sources of exempt function income identified by               
          section 512(a)(3)(B) are:                                                   
               (1) amounts paid by members of the association as                      
               consideration for goods, facilities, or services;                      
               (2) amounts set aside for a charitable purpose;                        
               (3) amounts set aside for the payment of life, sick,                   
               accident, or other benefits; and                                       
               (4) reasonable costs of administration directly con-                   
               nected with components 2 and 3.                                        
          According to the Trustee, “It is apparent from the plain language           
          of the statute [section 512(a)(3)(B)] that reasonable costs of              
          administration are an independent basis of Exempt Function                  
          Income.”                                                                    
               Proceeding from its premises that reasonable costs of                  
          administration directly connected with a purpose described in               
          section 512(a)(3)(B)(i) or (ii) are one of the four independent             
          sources or components of exempt function income under section               
          512(a)(3)(B), the Trustee argues that the limitation in section             





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