Darwin J. Albers & Peggy L. Albers - Page 15




                                       - 15 -                                         
               At the core of petitioners’ position that the $8,216 for               
          “Employee benefit programs” claimed in petitioners’ Schedule F is           
          deductible under section 162(a) are petitioners’ contentions                
          that:                                                                       
               (1) “The payment of medical expenses and insurance                     
               premiums were made on behalf [of] Peggy Albers, a bona                 
               fide employee of Darwin Albers’s farm business, pursu-                 
               ant to a valid I.R.C. § 105(b) health plan [AgriPlan/                  
               AgriBiz medical reimbursement plan]; therefore, Peti-                  
               tioners are entitled to deduct the reimbursements as an                
               employee benefits program expense on their Schedule F”;                
               (2) the claimed $3,586 of health insurance premiums                    
               “were paid directly on behalf of Peggy Albers, an                      
               employee, to reimburse her for the medical expense                     
               incurred by her spouse pursuant to the I.R.C. § 105(b)                 
               plan [AgriPlan/AgriBiz medical reimbursement plan]”;                   
               (3) “Peggy Albers requested that her employer pay for                  
               these out-of-pocket medical expenses [the claimed                      
               $4,630 of medical and dental expenses] * * * and the                   
               expenses were in turn paid directly by the employer,                   
               Darwin Albers”;  and                                                   
               (4) “There is no provision in I.R.C. § 105 or the plan                 
               provided by Darwin Albers [the AgriPlan/AgriBiz medical                
               reimbursement plan] that prohibits the employer from                   
               paying the medical expense directly to the provider                    
               rather than reimbursing the employee.  In fact, I.R.C.                 
               § 105(b) explicitly provides that expenses can be paid,                
               ‘directly or indirectly,’ to the employee to reimburse                 
               the employee for expenses incurred by her, her spouse                  
               or dependents for medical care.”                                       




               14(...continued)                                                       
               The legislative history under sec. 162(l) establishes that             
          that statute was enacted “to reduce the disparity between the tax           
          treatment of owners of incorporated and unincorporated busi-                
          nesses.”  S. Rept. 104-16, at 11 (1995); see also H. Rept. 104-             
          32, at 7-8 (1995).                                                          





Page:  Previous  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  Next 

Last modified: November 10, 2007