Rev. Rul. 71-52 was published before

the 1983 statutory changes to sections 3121(a) and 3306(b) described above. In addition, in 1971, the Old-Age, Survivors, and Disability Insurance (OASDI) contri

1Sections 3121(a) and 3306(b) were amended by section 327(b)(1) and (c)(4), respectively, of the Social Security Amendments of 1983.

2Section 603 of the Tax Reform Act of 1976, Pub. L. No. 94-355, 90 Stat. 1520, amended former section 422 to provide, generally, that qualified stock options could not be granted after May 20, 1976. Current section 422 (Incentive Stock Options) was added to the Internal Revenue Code of 1954, as section 422A, by section 251(a) of the Economic Recovery Tax Act of 1981, Pub. L. No. 97-34, 95 Stat. 172. Subsequently, section 11801(c)(9)(A)(i) of the Omnibus Budget Reconciliation Act of 1990, Pub. L. No. 101-508, 104 Stat. 1388, repealed former section 422 (Qualified Stock Options) and redesignated former Code section 422A as section 422 of the Internal Revenue Code of 1986.

2001–6 I.R.B. 517 February 5, 2001

bution and benefit base was only $4,800, as compared to the current OASDI wage base of $80,400. Further, in 1971, the $4,800 limit applied to the Hospital Insurance (HI) portion of the FICA tax as well as to the OASDI portion; by contrast, under current law, there is no limit on the amount of wages for purposes of the HI portion. Accordingly, in 1971, since most optionees had other wages that equaled or exceeded the FICA wage base, inclusion of option-related income in FICA wages would have had no effect on the FICA tax liability or Social Security benefits of most optionees (and no appreciable effect on FICA receipts). Given the increased wage base for purposes of the OASDI portion of the FICA tax and removal of the limit on the wage base for purposes of the HI portion, that is no longer the case.