Masonry Magazine August 1971 Page. 18
Taxes
The IRS is going to publish an amendment that will clarify the status of certain union-negotiated group-term life insurance plans. The amendment would not be limited to union-negotiated plans but it seems that it is from such union-negotiated plans that the problem arose.
According to the present regulation if any employee, covered under a plan, is provided group-term life insurance protection by a policy containing permanent insurance, a paid-up value, or an equivalent benefit, each covered employee must similarly be eligible for the same benefits.
The new amendment will make clear that an employer may have more than one plan of group-term life insurance without any plan being considered discriminatory solely because there is more than one plan.
The amendment further provides that since an employer may have more than one plan, only employees in the same class must similarly be eligible for the permanent insurance, paid-up value or equivalent benefit. I.R.S. News Release, No. 1135.
POLITICAL CONTRIBUTIONS
Again this year, Congress is working on a bill that would provide some sort of tax deduction for political contributions. Eventually, some sort of tax deduction bill will probably make it to the President's desk.
This most recent legislation is intended to promote fair practices in the conduct of election campaigns for federal political officers. More specifically the bill contains income tax incentives for contributions to candidates for election as president, vice-president, a presidential or vice-presidential elector, or a senator or representative.
The bill offers an option to the taxpayer who makes a political contribution. He can get a tax credit-not exceeding $20-equal to one-half of the political contribution. Thus, in order to get this $20 credit on his total federal income tax bill, a taxpayer would have to make a political contribution of at least $40. Obviously, on a joint return that credit could be $40 if each spouse made a political contribution of $40.
Taxpayers would be permitted (if this bill becomes law) to take the credit or they may take a deduction not exceeding $100 for such political contributions. This option to take a credit or deduction would make the income tax incentive available not only to those taxpayers who itemize their taxes and could take a political contribution deduction, but also, by way of the tax credit, to those taxpayers who do not itemize their deductions.
Neither the tax credit nor the political contribution deduction is made available by this bill to estates, trusts or corporations.
BONUS MANDATORY
The Sixth Circuit Court of Appeals has upheld the ruling of the Tax Court that the annual bonus paid by the Lincoln Electric Company for some 30 years ceased to be discretionary with the Board of Directors of Lincoln.
For some 30 years Lincoln had paid an annual "bonus" to each of its employees in December. The amount of the "bonus" was determined by the Board of Directors and there was no fixed formula for determining the total amount of the bonus. There was no express agreement between Lincoln and its employees in regard to the payment of the "bonus."