Allow me a moment to editorialize.
It is because individuals continue to try and manipulate the intent of tax-favor laws, that the rest of us have to deal with the expense associated with dealing with pages and pages of regulations.
While many of us are out here fighting and trying to make arguments for fewer burdensome and costly regulations, examples like this remind us why regulators continued to feel empowered to do more.
Plans can have a safe harbor definition of compensation that excludes taxable fringe benefits. That DOES depend on plan language and I am glad to have the opportunity to clarify my statement that plan language does not matter for income tax purposes.