SOUTH TEXAS COMMERCIAL NAT. BANK OF HOUSTON

v.

COMMISSIONER OF INTERNAL REVENUE

The trustor reserved the right to amend the trust agreement in any manner considered desirable for a more efficient accomplishment of its purposes, with the sole limitation that no part of the trust estate could be diverted to any other purpose. When the trust was created, the agreement was printed in pamphlet form and copies distributed to the employees. Thereafter no communication relative to it was made by the bank to its employees. If new employees were informed of the pension plan, it was not done officially by the trustor or trustee. Additions to the trust fund were made by the bank, and deductions from its income also made, during the tax years in controversy.

No standards whatever were established to determine eligibility for pensions. There was not even a provision that needy employees were eligible. The taxpayer retained complete freedom to choose the particular employees for whom it especially desired to make pecuniary provision. It created a fund for the disbursement of money to its officers and employees in accordance with its future discretion. The trustor was not required to pay any retired employee any amount, but if any sum was paid, it had to be not less than $25 and not over $250 per month. Otherwise, the distributions by the trustee to employees were subject only to the control of the trustor, who in fact was the trustee; the employees were given no vested interest in the trust estate either as individuals or as members of a class.2

We agree with the Tax Court that the petitioner did not establish a reasonable pension plan and was not entitled to the deductions. On who claims a deduction for tax purposes must bring himself within the precise terms of the statutory provision permitting the deduction.3 The decision of the Tax Court is affirmed.

This case is controlled by Sections 23 (p) and 165 of the Internal Revenue Code as they existed prior to amendment by the Revenue Act of 1942.

The chairman of the board of directors of the trustor-trustee bank testified that the trust agreement was intentionally drawn so that the employees would have no financial interest in the fund and that the bank could not be sued by any of its employees. It. 36.

Burnet v. Houston, 283 U.S. 223, 51 S.Ct. 413, 75 L.Ed. 991; New Colonial Ice Co. v. Helvering, 292 U.S. 435, 440, 54 S.Ct. 788, 78 L.Ed. 1348; Deputy v. Du Pont, 308 U.S. 488, 60 S.Ct. 363, 84 L.Ed. 416.