rr-98-19.pdf

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# Part I

Section 61. -- Gross Income Defined
26 CFR 1.61-1: Gross income.

Rev. Rul. 98-19

ISSUE

Is a relocation payment authorized pursuant to section
105 (a) (11) of Title I of the Housing and Community Development
Act of 1974 (Act), 42 U.S.C. § 5305 (a) (11), funded under the 1997
Emergency Supplemental Appropriations Act for Recovery From
Natural Disasters (Supplemental Act), Pub. L. No. 105-18, 111
Stat. 158, 198-199, and made by a local jurisdiction to an
individual moving from a flood-damaged residence to another
residence, includible in the individual's gross income under § 61
of the Internal Revenue Code?
FACTS

Pursuant to the Act and the Supplemental Act, a resident of
a local jurisdiction, within a Presidentially-declared disaster
area in the upper Midwest, received a relocation payment from the
local jurisdiction to help defray the expenses of moving from the
resident's flood-damaged residence to another residence.

According to section 101 (c) of the Act, the primary
objective of Title I "is the development of viable urban
communities, by providing decent housing and a suitable living
environment and expanding economic opportunities, principally for

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persons of low and moderate income."
42 U.S.C. § 5301 (c) .
Section 105 (a) (11) of the Act provides, in part, that a community
development program may provide relocation payments and
assistance for displaced individuals and families as authorized
under the Act. 42 U.S.C. § 5305 (a) (11) .

The Supplemental Act provides funding, for displaced
individuals and families as authorized under the Act, to certain
communities affected by the flooding in the upper Midwest and
other Presidentially-declared disasters occurring during the
federal government's fiscal year ending September 30, 1997.
LAW AND ANALYSIS

Section 61 and the Income Tax Regulations thereunder provide
that, except as otherwise provided by law, gross income means all
income from whatever source derived.

The Service has held that payments made under legislatively
provided social benefit programs for the promotion of general
welfare are not includible in a recipient's gross income. See
Rev. Rul. 76-373, 1976-2 C.B. 16, which holds that relocation
payments received by individuals pursuant to section 105 (a) (11)
of the Act are in the nature of general welfare and are not
includible in the gross incomes of recipients.
HOLDING

A relocation payment authorized pursuant to section
105 (a) (11) of the Act, funded under the Supplemental Act, and
made by a local jurisdiction to an individual moving from a
flood-damaged residence to another residence, is in the nature of
general welfare and is not includible in the individual's gross

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income under § 61.

## DRAFTING INFORMATION

The principal author of this revenue ruling is Sheldon A.
Iskow of the Office of Assistant Chief Counsel (Income Tax and
Accounting) . For further information regarding this revenue
ruling, contact Mr. Iskow on (202) 622-4920 (not a toll-free
call) .