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for the medical care (as defined in section 213(d)) of the
employee and the employee’s spouse and dependents. Sec. 105(b).
For the reasons set forth below, we agree with petitioners
that pursuant to sections 105 and/or 106 payments by Wolf Creek
Farm for reimbursement of medical care costs (including
reimbursement for the health insurance premiums) need not be
included in Mr. Tschetter’s income for 1995, 1996, and 1997.
Section 105(e) requires first, that the benefits be received
under a “plan”, and second, that the plan be “for employees”,
rather than for some other class of persons such as shareholders
and their relatives. Larkin v. Commissioner, 48 T.C. 629, 635
(1967), affd. 394 F.2d 494 (1st Cir. 1968). After giving due
consideration to the record before us, we conclude that Wolf
Creek Farm’s medical reimbursement plan satisfies both the “plan”
and “for employees” requirements of section 105(e).
Section 1.105-5(a), Income Tax Regs., provides guidelines as
to what constitutes an accident or health plan. A plan may cover
one or more employees, and different plans may be established for
different employees or classes of employees. Sec. 1.105-5(a),
Income Tax Regs. The regulations do not require that there be a
written plan or that there be enforceable employee rights under
the plan, so long as the participant has notice or knowledge of
the plan. Wigutow v. Commissioner, T.C. Memo. 1983-620.
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