Rev. Rul. 78-209

Advice has been requested whether, under the circumstances described below, amounts paid by an international labor union as reimbursements for its delegate-members' travel and living expenses and lost salary incurred in connection with its annual convention are includible in the members gross incomes and are "wages" for purposes of sections 3121(a), 3306(b), and 3401(a) of the Internal Revenue Code of 1954.

The international union reimburses all delegates from its local chapters for their travel expenses to and from the convention. The union also reimburses the living expenses and the salary lost by the delegates during the time they are traveling and attending the convention. The delegates to the convention are elected by the local chapters.

Section 61(a) of the Code provides that gross income means all income from whatever source derived, except as otherwise provided by law.

Sections 3121(a), 3306(b), and 3401(a) of the Code provide, with certain exceptions, that the term wages means all remuneration for employment.

In the instant case, the reimbursement payments made by the international union to convention delegates are includible in the gross incomes of the recipients. See section 1.61-1(a) of the Income Tax Regulations where gross income is defined as including income realized in any form whether in money, property, or services.

The delegates attend the convention and participate in convention business as elected representatives of their local chapters, rather than as employees of the local chapters or of the international union.

Accordingly, the reimbursements made by the international union to the delegates in the instant case for travel and living expenses and lost salary are not wages for purposes of sections 3121(a), 3306(b), and 3401(a) of the Code.

If the international union makes a payment of $600 or more or payments aggregating $600 or more in one calendar year to one of the delegates, it must file an annual information return on Form 1096, Annual Summary and Transmittal of U.S. Information Returns, accompanied by a statement on Form 1099-MISC, Statement for Recipients of Miscellaneous Income, for each such delegate.