Rev. Rul. 76-229

The Trade Act of 1974, 19 U.S.C. sections 2101-2487 (Supp. IV, 1974), was enacted to promote the development of an open, nondiscriminatory, and fair world economic system, to stimulate fair and free competition between the United States and foreign nations, and to foster the economic growth of, and full employment in, the United States. In enacting the statute, Congress reasoned that the special nature of employment dislocation, resulting from changes in trade policy, necessitated a level of worker protection somewhat beyond what is available through regular state unemployment insurance programs. S. Rep. No. 93-1298, 93d Cong., 2d Sess. 131 (1974).

Sections 231 and 232 of the Trade Act of 1974, 19 U.S.C. section 2291 (Supp. IV, 1974) and 19 U.S.C. section 2292 (Supp. IV, 1974) [Pub. L. 93-618], 1975-1 C.B. 501, provide for the payment of trade readjustment allowances to qualified adversely affected workers who have become unemployed because of a lack of work due in major part to the effect of increased imports upon the workers' employing firms.

Held, trade readjustment allowances received by adversely affected workers pursuant to sections 231 and 232 of the Trade Act of 1974 are in the nature of general welfare and are not includible in a worker's gross income. See also Rev. Rul. 74-205, 1974-1 C.B. 20, which states, in part, that the Internal Revenue Service has consistently held that payments made under legislatively provided social benefit programs for promotion of the general welfare are not includible in a recipient's gross income.