- 17 - 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. Weeldreyer was an employee of Dreyer Farms. Indeed, Mr. Weeldreyer was the corporation’s only employee. And without Mr. Weeldreyer’s involvement, Dreyer Farms could not have conducted its farming operations. Mr. Weeldreyer’s compensation for services rendered to Dreyer Farms was his salary and employee benefits. Respondent does not contend that Mr. Weeldreyer received excessive compensation. Indeed, respondent contends that Mr. Weeldreyer was undercompensated for his services. Although Mrs. Weeldreyer did not work for Dreyer Farms, payment of her medical expenses was based on her status as Mr. Weeldreyer’s spouse. Likewise, payment of the medical expenses for the Weeldreyers’ children was based on their status as Mr. Weeldreyer’s dependents. The derivative participation of Mr. Weeldreyer’s spouse and dependents is plainly contemplated both by the medical plan and by section 105(b). On the basis of the record before us, we conclude that medical payments made for the benefit of the Weeldreyers and their children were made under a plan for employees and not for shareholders. Accordingly, during the years at issue, thePage: Previous 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Next
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