Court Opinion

ID: 4475197
Source: CourtListenerOpinion
Date Created: 2020-01-16 21:11:23.201188+00
Date Added: 2024-06-11T15:04:22.190396
License: Public Domain

Disney, /., dissenting: Cognizant fully of the necessity for regulations on a complicated subject, nevertheless I am not able to agree that the regulation involved here is not an unwarranted addition to the statute. Paraphrased, and as far as here concerned, the statute provides exemption for a trust which forms part of a profit-sharing plan if contributions are made thereto by the employer and the employer can not divert such contributions away from the exclusive benefit of employees or their beneficiaries. The regulation, however, as reflected in the respondent’s contention, adds, in substance, that the plan must be permanent and for a definite program. The Commissioner says that this plan is not permanent because it involves a single contribution with disposition at the end of ten years, and there is no definite program because there is no definite formula for determining profits. I find no such requirements in the statute. It does not say permanent plan, but merely “plan,” and it says nothing about program or definite formula for determining profits. Indeed, the profits are determined here — determined at $1,000,000, the amount contributed. It seems to me that the word “plan,” under the ordinary canon of statutory construction that language shall be used in its ordinary sense, plainly includes what the employer here did. To say that there was no plan involved in this affair seems unrealistic. The Commissioner’s power to promulgate regulations appears improperly exercised when it narrows the general expression “plan” by requiring that it entail certain things, such as permanency and definite formula. Such regulation might be used to modify, narrow, and curtail almost any expression used by Congress, merely because it is subject to definition. Such restriction is not, in my view, a permissible function of regulation. The petitioner’s profits were shared with its employees and their beneficiaries, beyond recall. I would not distinguish between this petitioner and one which made its contribution over several years instead of a single contribution to be utilized over ten years, as here, or one which had a more definite program for determining all profits to be shared. They were here determined by the contribution. Having made an irrevocable contribution for its employees, certainly with a plan, because ultimate segregation and disposition were to be at the end of ten years, petitioner should not, in my opinion, be denied the statutory exemption. I, therefore, respectfully dissent. Aeundell and Van Fossan, JJ., agree with this dissent.