Robert W. Tschetter - Page 14

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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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