CNG Transmission Mgmt. VEBA v. US, No. 09-5025

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 of the United States Court of Federal Claims 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 CNG'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.   

Read CNG Transmission Mgmt. VEBA v. US, No. 09-5025

Appellate Information

Appeal from:  United States Court of Federal Claims

Decided December 14, 2009

Judges

Before:  Mayer, Linn, and Prost,  Circuit Judges

Opinion by Mayer, Circuit Judge

Counsel

For Appellant:   Eric R. Fox, Ivins Phillips & Barker

For Appellee:    Kenneth L. Greene, Appellate Section, Tax Division, U.S. Department of Justice