United States Federal Circuit

In petitioner's claim that it was not obligated to pay tax on its investment income because it had spent that income on member benefits during the year, judgment holding that a voluntary employees' beneficiary association (VEBA) may not avoid the limitation on exempt function income in 26 U.S.C. section 512(a)(3)(E)(i) by allocating investment income to the payment of member benefits is affirmed as the language of the statute is clear and unambiguous in that petitioner's investment income caused its total fund balances to exceed the statutory account limit, and as such, that investment income cannot be classified as exempt function income.

Appellate Information

• Decided 12/14/2009
• Published 12/14/2009

Judges

Court

• United States Federal Circuit

Counsel