Sherwin-Williams Company Employee Health Plan Trust - Page 19




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          statement supports the Trustee’s position here that one of the              
          four independent sources or components of exempt function income            
          under section 512(a)(3)(B) is reasonable costs of administration            
          directly connected with a purpose described in section                      
          512(a)(3)(B)(i) or (ii).                                                    
               In further support of its position that reasonable costs of            
          administration directly connected with a purpose described in               
          section 512(a)(3)(B)(i) or (ii) qualify as one of the four                  
          independent sources or components of exempt function income under           
          section 512(a)(3)(B), the Trustee relies on the instructions to             
          Forms 990-T for the years at issue.  Those instructions provided            
          in pertinent part:                                                          
                    Sections 501(c)(7), (9), (17), and (20) organiza-                 
               tions will not be taxed on income set aside for:                       
                    1. Religious, charitable, scientific, literary, or                
               educational purposes, or for the prevention of cruelty                 
               to children or animals;                                                
                    2. The payment of life, sick, accident, or other                  
               benefits by a section 501(c)(9), (17), or (20) organi-                 
               zation.  The amount allowed as a set-aside may not                     
               exceed a limit determined using section 419A.  See                     
               sections 419A and 512(a)(3)(E) for details;                            
                    3. Reasonable administration costs directly con-                  
               nected with 1 and 2 above.                                             
               We acknowledge that the foregoing instructions to Forms 990-           
          T are not as clearly stated as section 512(a)(3)(B) is.  Nonethe-           
          less, we find those instructions to be consistent with the plain            
          language of section 512(a)(3)(B).  We have held that section                






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Last modified: May 25, 2011