IRS Ruling Addresses Employer's Use of VEBA Assets | Practical Law
The Internal Revenue Service (IRS) issued a private letter ruling addressing an employer's proposed amendment to its voluntary employees' beneficiary association (VEBA) trust, which funded health benefits for retired employees, to create a subaccount to fund health benefits for its active employees. The IRS concluded that the tax benefit rule would not apply and the employer would not be subject to excise taxes under Section 4976 of theInternal Revenue Code.