Rev. Rul. 65-251

Lump sum separation and severance allowances paid to laid-off employees in the railroad industry pursuant to paragraphs C(2), C(3) and C(6) of the Award of Arbitration Board No. 282 of the National Mediation Board are held to be `compensation' subject to the taxes imposed under the Railroad Retirement Tax Act (chapter 22, subtitle C, Internal Revenue Code of 1954) and `wages' subject to the Collection of Income Tax at Source.