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consideration to the record before us, we conclude that Waterfall
Farms’ 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. Id. 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.
In the instant case, a plan (as defined in section
1.105-5(a), Income Tax Regs.) existed. Waterfall Farms 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. Huber 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 includes health insurance costs.
Sec. 213(d)(1)(D). And finally, we are satisfied that the
corporation’s medical plan was for Mr. Huber as an employee of
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