Lansons, Inc. v. Commissioner
United States Tax Court
Petitioner Lansons, Inc., established a profit-sharing trust for the benefit of its employees in 1968. At the suggestion of respondent in response to a ruling request, the eligibility requirements were amended to require only that the employee be between the ages of 25 and 66 and have 1 full year of service.
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Petitioner Lansons, Inc., established a profit-sharing trust for the benefit of its employees in 1968. At the suggestion of respondent in response to a ruling request, the eligibility requirements were amended to require only that the employee be between the ages of 25 and 66 and have 1 full year of service. Respondent thereupon issued a ruling letter that the trust qualified under sec. 401(a). After an audit on Dec. 1, 1972, respondent wrote petitioners a letter revoking his favorable ruling retroactively, and disallowed deductions for contributions made by Lansons to the trust in 1969,…
1DissentSimpson, J.
In my judgment, the majority has embraced conclusions which are out of step with the decisions of this and other courts. It is well settled that although a formula for determining eligibility to participate in an employee plan may not be discriminatory on its face, it must be tested in operation, and if in operation the formula results in the prohibited discrimination, the plan does not qualify. Here, substantially all of the benefits accrued to members of the prohibited group; nevertheless, the Court has held the plan to be qualified, and I must dissent from that conclusion.
The predecessor…
2Cases cited15 opinions
- Automobile Club of Mich. v. CommissionerSupreme Court of the United States · 1957
- Dixon v. United StatesSupreme Court of the United States · 1965
- Commissioner of Internal Revenue v. Pepsi-Cola Niagara Bottling CorporationCourt of Appeals for the Second Circuit · 1968
- Ed & Jim Fleitz, Inc. v. CommissionerUnited States Tax Court · 1968
- Loevsky v. CommissionerUnited States Tax Court · 1971
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