Rev. Rul. 58-613

In view of a number of adverse court decisions in cases involving voluntary payments to widows by their deceased husbands' employers, the Internal Revenue Service will no longer litigate, under the Internal Revenue Code of 1939, cases involving the taxability of such payments unless there is clear evidence that they were intended as compensation for services, or unless the payments may be considered as dividends. Payments which will be considered as `voluntary' in applying this policy do not include payments made pursuant to a contract or otherwise binding obligation or pursuant to a plan or statute in effect before the husband's death.

In line with this new litigation policy, field offices of the Service will similarly dispose of 1939 Code cases not yet in litigation.

The foregoing represents a litigation policy, to be implemented by consistent administrative action, pertaining to 1939 Code cases only. The position of the Service with respect to cases in this area arising under the Internal Revenue Code of 1954 involves other considerations and will be made the subject of a future announcement.

¹ Based on Technical Information Release 87, dated August 25, 1958.