Evening star., 1953-07-03
UNIV Pensions
Are Reported
Held taxable
900, 900 Retired
Workers May Foce
Bills From Bureau
BY the Assecioted Press

Inc bureau OF internal Reve.
nue. repeatedly has ruled that
the United Mine Workers must
pay taxes on the income from its
$50 million welfare fund and
that retired miners must pay
taxes on their pensions.
Informed persons said today
the decision presumably means
that 10000 retired pensioners of
John l.. Lewis union will be
billed for taxes from the start of
their pensions-in some cases
back to 1948.
The fund has paid out over
$500 million. Individual pen
sions are $l00 month. Tax bills
would vary according to what
other income the pensioner had,
but individuals could be liable
for hundreds, or even thousands,
of dollars.
4O-Cents-a-TOn Royalty.
The fund is supported by a
4O-cents-a-ton royalty paid by
mine operators on coal pro-
duced. This has built up the big
reesrve as well as meeting cur
rent pensions and other costs.
The income from invested
funds was reported as close to
$769,000 in the last year.
Neither the bureau nor the
welfare and retirement fund
headquarters here would discuss
the reported decision which
comes six years after the queS-
ton first came under study.
1nformants said, however, that
the finding appears to permit the
mine operators to continue to
treat the royalty payments as a
business cost. deductible for tax
purposes.
The bureau is said to have held
that the pension fund need not
make retroactive payment of
taxes on it's investment income
OF previous years.
Reason for Retroactivity.
The reason for retroactivity in
the case of the miners them
selves, it was stated, is that the
miners were put on notice in
1948 that they should pay taxes.
whether or not the fund was
found to be eligible for tax ex-
emption.
UNIV officials, while declaring
themselves ignorant of the bu-
reau's decision, said that if such
a ruling were made, it would
affect close to $4,000 pensioners
among retired soft coal workers
and about 10000 retired anthra-
cite miners.
The fund was created in 1946
while the mines were under Fed
eral seizure following a strike.
Some welfare payments began
the following year but the first
pension check was issued in Sep
tember, 1948.
The union is expected to make
strong fight against the tax
ruling. 1t can carry the case to
the United States Tax Court.
Board Managers Fund.
The welfare fund is managed
by a board of trustees made uo
of Mr.. Lewis, representing the
union; Charles Owen of New
York, representing the operators,
and Mrs. Josephine Roche, as
neutral trustee and director of
the fund.
Aside from pensions, the fund
pays hospital and medical bene-
fits and death payments.
There was no immediate word
whether the reported ruling ap-
piled to any such payments
other than the pensions.
Mr.. Lewis is out of town on a
vacation, but Tom Kennedy, in
ternational vice president of the
uIllOn, COlQ reporters:
This matter is being handled
by our attorneys. We are not
saying anything at this time"
Some Have Paid Tax.
One union source said that
field agents of the Revenue Bu-
reau, in some regions, have ad-
vised individual miners that the
pension payments were taxable,
Some miners accordingly have
paid taxes on their pensions, 1t
was understood.
The Internal Revenue Bureaus
ruling requires the welfare fund,
it was reported, to furnish the
bureau with a statement of bene-
fit payments to each individual
back to 1948.
These statements would be
similar to the annual statements
required of employers as to the
amount of wages paid to en-
ployes - data required by the
Government to check correctness
of income tax returns of indi-
NriItIal 70