March 14, 1991
TO: PENSION MEMBERS NO. 13-91
RE: IRS DEFINES COMPENSATION FOR IRA PURPOSES
__________________________________________________________
Attached is Revenue Procedure 91-18 which the Internal
Revenue Service released for the purpose of providing guidance
regarding the definition of "compensation" which is used to
determine if an individual qualifies to make deductible
contributions to an IRA.
The Service stated that, as a matter of administrative
convenience, the amount shown in box 10 of Form W-2 (wages, tips
and other compensation), less any amount shown in box 14 for 1990
and box 16 for 1991 (nonqualified plans) will be treated as a
"safe harbor" definition of compensation for purposes of
determining a taxpayer's deductible and nondeductible IRA
contributions, as appropriate.
We will keep you informed of developments.
W. Richard Mason
Assistant Counsel - Pension
Attachment