Yeomans Distributing Co. v. United States
The taxpayer established a non-qualified deferred compensation plan for the benefit of its controlling shareholder, the father of one of its minority shareholders, and thereafter, for the benefit of the father’s surviving spouse.
Nearly concurrently, the father made gifts of shares of the taxpayer to the minority shareholders. After the death of the controlling shareholder, the Internal Revenue Service contended that the benefit payments made to the surviving spouse of the controlling shareholder were non-deductible dividend distributions. 607 F. Supp. 42 (D. Ill. 1985).
