- 13 -
from the service of the employer, constitute wages regardless of
whether the employer is legally bound by contract, statute, or
otherwise to make such payments.” Sec. 31.3401(a)-1(b)(4),
Employment Tax Regs.; see Driscoll v. Exxon Corp., 366 F. Supp.
992 (S.D.N.Y. 1973). But see United States v. Jefferson-Pilot
Life Ins. Co., 49 F.3d 1020 (4th Cir. 1995) (rejecting an
argument that Congress intended the term “salary or wages” in
section 6331(e) to have the same meaning as the term “wages” in
the employment tax provisions). In addition, for purposes of the
Federal Insurance Contributions Act (FICA) tax under section
3121, the term “wages” has been construed to include severance
pay. See, e.g., McCorkill v. United States, 32 F. Supp. 2d. 46
(D. Conn. 1999); see also Rev. Rul. 71-408, 1971-2 C.B. 340
(treating dismissal payments as “wages” for FICA, Federal
Unemployment Tax Act, and Federal income tax withholding
purposes).
Fourth, the term “salary or wages” in section 6331(e) has
been construed broadly. For example, in United States v.
Jefferson-Pilot Life Ins. Co., supra, the U.S. Court of Appeals
for the Fourth Circuit concluded that the term “salary or wages”
in section 6331(e) includes commissions paid to independent
contractors. In doing so, the Court of Appeals went beyond the
employer-employee relationship that we normally associate with
salary and wages. We believe that a similarly broad construction
Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Next
Last modified: May 25, 2011