Vebas, Welfare Plans & Sec. 419a(F)(6): Is the IRS Trying to Regulate or Spread Propaganda?

Abstract

In this first law review article on the subject of sec. 419A(f)(6) multiple employer welfare plans, the authors examine the purposes of welfare plans, the history of VEBAs and welfare plans, all relevant case law, and the basis for IRS litigation in the area. The article examines recent private letter rulings and faulty reasoning used by IRS personnel. Based on precedent, the authors opine that the IRS is engaged in a propaganda campaign to discredit welfare plans as appropriate financial planning tools for business owners and large companies. The authors compare recent proposed legislation to perceived abuses and conclude that the ideas contained in the proposed legislation are appropriate responses to battle perceived abuses yet permit VEBAs and welfare plans to serve their historical, laudable, purposes.

Keywords: VEBA, welfare plan, 419A(f)(6), propaganda, legislation, regulation

JEL Classification: H20, H23, H24, H25, H26, H30, H50, H51, H53, J26