Jump to content

Welfare Benefit Funds


Guest Ira Hayes
 Share

Recommended Posts

Guest Ira Hayes

Can a corporation which pays federal income tax be both a welfare benefit plan sponsor and welfare benefit fund under IRC Section 419(e)(3)(B)? If not, why not?

Link to comment
Share on other sites

I have a hard time envisioning a situation in which this would be possible. Clearly "fund" includes a "trust, corporation, or other organization", but I believe that the type of corporation referred to here would be a taxable nonprofit corporation established to provide the welfare benefits promised (similar to a VEBA but without meeting all of the requirements of IRC Section 501©(9)).

Can an employer skipped setting up a trust and just call themselves a "fund". Recent Revenue Ruling 2007-65 would certainly disallow tax deductions under such arrangement. I therefore wonder what purpose would be served by such arrangement other than set aside a part of a company's retained earnings to avoid excess profits tax.

Link to comment
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
 Share

×
×
  • Create New...