Internal Revenue Service
Revenue Ruling

TaxLinks.com   sm

 Rev. Rul. 73-90

1973-1 C.B. 64

Sec. 162

IRS Headnote

An amendment to a supplemental unemployment benefit plan, to permit the employer when authorized by an employee to deduct and pay the employee's union dues from his benefit or separation check, does not affect the deductibility of the employer's contributions.

Full Text

Rev. Rul. 73-90

Revenue Ruling 56-102, 1956-1 C.B. 90, holds that employer contributions to an independently controlled trust fund, created solely for the purpose of furnishing supplemental unemployment benefits to certain employees, constitute ordinary and necessary business expenses that are deductible from gross income, under section 162(a) of the Internal Revenue Code of 1954, in the taxable year in which paid or incurred.

A supplemental unemployment benefit plan conforming to that described in Revenue Ruling 56-102 has been amended to provide that an employee covered by the plan may authorize the trustee of the plan to deduct monthly union dues from a benefit or separation payment and pay such sum directly to the union on his behalf.

Held, employer contributions to the trust fund under the amended plan are ordinary and necessary business expenses deductible from gross income, under section 162(a) of the Code, in the taxable year when paid or incurred.