Rev. Rul. 71-456

During 1970 an employer paid death benefits to the beneficiaries and estates of deceased employees and other amounts representing regular compensation that was earned immediately preceding death but unpaid at the time of death. The death benefits were paid under a plan established by the employer for all employees.

Held, the death benefit payments made to beneficiaries and to the estates of deceased employees as well as payments representing unpaid compensation for services rendered by deceased employees are not wages for purposes of the collection of income tax at source.

Further held, amounts paid under a plan established by an employer that makes provision for his employees generally because of death are also excepted from the provisions of the Federal Insurance Contributions Act and the Federal Unemployment Tax Act. See Rev. Rul. 69-286, C.B. 1969-1, 253. However, the unpaid compensation for services rendered is "wages" for purposes of these Acts.

I.T. 3737, C.B. 1945, 319, is hereby superseded, since the position stated therein is set forth under the current statute and regulations in this Revenue Ruling.

¹ Prepared pursuant to Rev. Proc. 67-6, C.B. 1967-1, 576.