Gross Income v. Not Gross Income

ID:
Office:
UILC:
CCA_2009061809403532
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61.00-00
Number: 200929007
Release Date: 7/17/2009
From: ---
Sent: Thursday, June 18, 2009 9:40:40 AM
To: ---
Cc: ---
Subject: RE: ARRA Funds
--- I asked for clarification. This is what came back:
We have consistently held that payments made under legislatively provided social benefit programs for the promotion of the general welfare, that do not represent compensation for services, are not includible in a recipient’s gross income. The principal question is whether the payments represent 'payments for services' where work activities are required. Numerous Revenue Rulings, including the cited Revenue Ruling 75-246, clearly illustrate that not all payments made in connection with the performance of work activities represent payment for services; making the determination is a factual matter. Under the rationale of Revenue Ruling 71-425, in cases where services are performed, a determination needs to be made as to whether the payments are in lieu of welfare payments that these individuals would otherwise be eligible to receive because they meet need-based criteria (they are lowincome, disabled, economically disadvantaged, unemployed, underemployed etc.).
I'm not aware that we have addressed any particular AARA program. However, if a particular state asks us to address their program, or if --- wants advice on a specific case, ---will be happy to address it if there is enough factual background information provided to make a determination. Hope this is helpful.
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