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Waterfall Farms, 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.
Respondent has stipulated that during the years at issue Mr.
Huber was an employee of Waterfall Farms. Indeed, Mr. Huber was
the corporation’s only employee. And without Mr. Huber’s
involvement, Waterfall Farms could not have conducted its farming
operations.
Mr. Huber’s compensation for services rendered to Waterfall
Farms was his salary and employee benefits. Respondent does not
contend that Mr. Huber received excessive compensation. Indeed,
respondent contends that Mr. Huber was undercompensated for his
services.
Although Mrs. Huber did not work for Waterfall Farms,
payment of her medical expenses was based on her status as Mr.
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