- 13 -
arrangement[7] with his employer.” Sec. 62(a)(2)(A). This
language incorporates and illustrates a general proposition that
applies across the board to section 62(a) and also highlights
theadditional specific restrictions to which employees are
7Sec. 62(a)(2)(A) and its statutory predecessors do not
contain and have never contained a definition of the term
“arrangement”. However, the regulations under sec. 62(c) treat
the terms “arrangement” and “plan” as synonymous. Sec. 1.62-
2(k), Income Tax Regs., provides that if “a payor’s reimbursement
or other expense allowance arrangement evidences a pattern of
abuse of the rules of section 62(c) and this section, all
payments made under the arrangement will be treated as made under
a nonaccountable plan.”
Dictionary definitions of the terms “arrangement” and “plan”
are helpful, although not dispositive, in indicating that the
terms encompass a continuing relationship, rather than a one-shot
payment of the type at issue in the case at hand. The primary
definition of “arrangement” in Webster’s New Universal Unabridged
Dictionary 103 (2d ed. 1979) as “the act of putting in proper
order; also, the state of being put in order” implies two or more
elements. The use of the term in bankruptcy arrangements has
multiple elements encompassing multiple creditors of the debtor
whose affairs are arranged and a variety of terms and provisions
regarding the payment or provisions for payment of his debts.
Similarly the dictionary definitions of “plan”, id. at 1372, as
“a scheme for making, doing, or arranging something; a project; a
program; a schedule”, encompass or imply multiple elements for
accomplishing something over a period of time.
The law of Federal preemption under the Employee Retirement
Income Security Act of 1974 (ERISA), Pub. L. 93-406, 88 Stat.
829, is in accord. See Fort Halifax Packing Co. v. Coyne, 482
U.S. 1 (1987) (Maine statute requiring employers to provide one-
time severance payment to employees terminated in event of plant
closing not preempted by ERISA, which was intended to afford
employers uniform administrative procedures governed by Federal
regulations; ERISA concern arises only with respect to benefits
whose provision requires ongoing administrative program to meet
employer’s obligations; thus Congress intended to preempt State
laws relating to plans, rather than those simply relating to
benefits).
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011