WHEREAS:

The Internal Revenue Service (IRS) has recently announced that beginning January 1, 1988 state and local government and non-profit employees' deferred benefits such as sick and vacation leave, death and disability income plans, severance pay and compensatory time will be subject to taxation as accrued, instead of when the benefits are used; and

WHEREAS:

This IRS action will result in a federal income tax increase for hundreds of thousands of government employees who will be taxed on benefits they do not control, have not received, and, in many cases, may never have the opportunity of using; and

WHEREAS:

This IRS action would impose a major new administrative burden on state and local governments who must compute and report the value of such benefits.

THEREFORE BE IT RESOLVED:

That AFSCME oppose this unfair and unjust plan by the IRS to tax state and local government and non-profit workers' deferred benefits; and

BE IT FURTHER RESOLVED:

That AFSCME urge Congress to enact legislation clarifying that state and ]coal government and non-profit institution benefit arrangements, as defined by state and local law or collectively bargained agreement, are exempt from the IRS plan to tax employee benefits at accrual.

SUBMITTED BY:

International Executive Board