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GLSO. In calculating the qualified asset account limit
for this purpose, a reserve for post-retirement medical
benefits under section 419A(c)(2)(A) is not to be taken
into account. [Emphasis added.]
Q&A-3(a) plainly provides that, for purposes of determining
the limitation prescribed by section 512(a)(3)(E)(i), a reserve
for post-retirement medical benefits described in section
419A(c)(2)(A) is not to be taken into account in “calculating the
qualified asset account limit”. Q&A-3(a) does not indicate that,
for those purposes, such a reserve is not to be taken into
account in calculating the amount of assets set aside as of the
close of a taxable year.
Our interpretation regarding the parenthetical phrase
appearing at the end of section 512(a)(3)(E)(i) also is supported
by the General Explanation of the Revenue Provisions of the
Deficit Reduction Act of 1984 that was prepared by the Staff of
the Joint Committee on Internal Revenue Taxation (General Expla-
nation). Congress enacted section 512(a)(3)(E)(i) into the Code
as part of the Deficit Reduction Act of 1984. See Deficit
Reduction Act of 1984, Pub. L. 98-369, sec. 511(b), 98 Stat. 860.
The General Explanation provides in pertinent part with respect
to section 512(a)(3)(E)(i):
The [Deficit Reduction] Act [of 1984] provides a
specific annual limit on the amount of income of a tax-
exempt VEBA * * * that may be considered a permissible
set aside. Under the Act, the amount of such an orga-
nization’s income for a year that may be considered set
aside as exempt function income is generally not to
increase the total amount that is set aside to an
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