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In the instant cases, a plan (as defined in section
1.105-5(a), Income Tax Regs.) existed. Wolf Creek Farm adopted a
written medical reimbursement plan identifying who was eligible
to participate, what expenses would be reimbursed, and how
participants were to make claims for reimbursement. The plan was
adopted at the first meeting of the board of directors.
Mr. Tschetter had knowledge of the medical reimbursement
plan. Moreover, the medical reimbursements provided under the
written plan included reimbursement for all “medical care” costs
deductible on Form 1040, which include health insurance costs.
Sec. 213(d)(1)(D). And finally, we are satisfied that the
corporation’s medical plan was for Mr. Tschetter’s benefit as an
employee of Wolf Creek Farm, and not for his benefit as one of
the corporation’s shareholders.
Plans limited to employees who are also shareholders are not
per se disqualified under section 105(b). Larkin v.
Commissioner, supra at 635 n.5. In this regard, we have
sustained plans for corporate officers who were also shareholders
because those officers had central management roles in conducting
the business of the corporation. Wigutow v. Commissioner, supra;
Epstein v. Commissioner, T.C. Memo. 1972-53; Seidel v.
Commissioner, T.C. Memo. 1971-238; Smith v. Commissioner, T.C.
Memo. 1970-243; Bogene, Inc. v. Commissioner, T.C. Memo.
1968-147.
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