INCOME TAX — Internal Revenue Bulletin 2004-50

Rev. Rul. 2004–110, page 960. Contract cancellation; employment contract. This ruling holds that an amount paid to an employee as consideration for cancellation of an employment contract and relinquishment of contract rights is ordinary income and wages for purposes of the Federal Insurance Contributions Act (FICA), the Federal Unemployment Tax Act (FUTA), and the Collection of Income Tax at Source (federal income tax withholding). Rev. Ruls. 55–520 and 58-301 modified and superseded. Rev. Ruls. 74–252 and 75–44 modified.

Notice 2004–80, page 963. This notice alerts taxpayers to recent amendments to sections 6111, 6112, and 6708 of the Code and provides interim guidance until regulations or other guidance is published.

Rev. Proc. 2004–65, page 965. This procedure provides exceptions to the contractual protection filter, which is a reportable transaction under section 1.6011–4(b)(4) of the regulations.

Announcements of Disbarments and Suspensions begin on page 977. Finding Lists begin on page ii.