21 August 2020 Internal T.I. 2019-0834911I7 - Qualified Retroactive Lump Sum Payments -- summary under Subparagraph (a)(i)

An employee bargaining unit and the Employer agreed to certain provisions in their collective bargaining process, and the remaining unresolved issues were agreed to be resolved using an alternate dispute resolution process involving a three-person binding conciliation board, which gave final and binding decisions. Did the resulting award of salary increases and wage adjustments constitute “qualifying amounts”?

After noting that the definition of “qualifying amount” referenced inter alia an “arbitration award,” the Directorate stated:

[I]f the particular lump-sum amount is paid to the individual as the result of an arbitration award resulting from a bona fide arbitration process, such a lump-sum amount could be a qualifying amount. This could apply even when the arbitration process is part of a normal collective bargaining process.

Such amounts “could be considered a qualifying amount.”

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