Deferred Compensation

Deferred Compensation is a financial arrangement whereby a portion of an employee's current wages are distributed at a later time, usually to delay tax liability. Deferred compensation often takes the form of... more +
Deferred Compensation is a financial arrangement whereby a portion of an employee's current wages are distributed at a later time, usually to delay tax liability. Deferred compensation often takes the form of stock options or severance payments.  less -
News & Analysis as of

The ERISA Litigation Newsletter - June 2016

Editor's Overview - In this month’s newsletter, our colleagues focus on two sets of legislative updates. First is a discussion of the IRS’s proposed Treasury Regulations prescribing rules under Section 457 of the...more

IRS Proposes New 457 Regulations for Nonqualified Deferred Compensation Plans of Tax-Exempt and Governmental Employers

At long last, the IRS has released new proposed regulations under Internal Revenue Code section 457 – anticipated since 2007 — regarding nonqualified deferred compensation arrangements offered by tax-exempt organizations and...more

IRS Issues Supplemental Guidance on Deferred Compensation Plans

The Internal Revenue Service (IRS) on June 21, 2016, published long-awaited proposed rules on nonqualified deferred compensation plans under Section 409A of the Internal Revenue Code of 1986, as amended (Section 409A). These...more

Nonqualified Deferred Compensation: IRS Proposes New Section 457 Regulations and Section 409A Clarifications

Last week, the Internal Revenue Service (IRS) proposed new regulations under Section 457 of the Internal Revenue Code (Code), which governs nonqualified deferred compensation plans of state and local governments and private...more

Proposed Section 409A Deferred Compensation Regulations Offer Helpful Clarifications of Current Rules

Treasury Department and IRS issue proposed regulations to address certain specific provisions of the existing Section 409A regulations. On June 21, 2016, the Department of the Treasury and the Internal Revenue Service...more

IRS Issues Proposed Regulations on Nonqualified Deferred Compensation Arrangements for Governmental and Tax-Exempt Entities

The Treasury Department last week issued long-awaited proposed regulations under Section 457(f) of the Internal Revenue Code regarding nonqualified deferred compensation arrangements sponsored by governmental and tax-exempt...more

IRS Releases Proposed Section 409A Regulations

The Treasury Department last week issued proposed regulations to supplement the existing guidance on the application of Section 409A of the Internal Revenue Code to nonqualified deferred compensation arrangements. ...more

Modifications to Code Section 409A Regulations

On June 22, 2016, the Internal Revenue Service published proposed regulations under Internal Revenue Code Section 409A, which applies to non-qualified deferred compensation plans and arrangements. The proposed regulations are...more

Updates to the 409A Rules

The Treasury Department and the IRS last week proposed changes to final and proposed regulations under Section 409A of the Internal Revenue Code. Compliance with 409A is required to avoid disadvantageous federal income tax...more

New Proposed Regulations for Nonqualified Deferred Compensation Plans

The Internal Revenue Service (IRS) has recently issued proposed regulations on nonqualified deferred compensation plans under Internal Revenue Code (Code) Section 409A. The regulations clarify and modify specific provisions...more

New Proposed IRS Regulations Have Potential Broad Implications for Deferred Compensation and Severance Arrangements of Tax Exempt...

Action Item: On June 22, 2016, the Internal Revenue Service (“IRS”) issued long-awaited proposed regulations under Section 457 of the Internal Revenue Code that could significantly impact the deferred compensation and...more

"New Rules Impact Compensation Arrangements of Governmental and Tax-Exempt Entities"

On June 22, 2016, the IRS published much-anticipated proposed regulations under Internal Revenue Code Section 457 impacting certain plans maintained by state or local governments or other tax-exempt organizations that provide...more

IRS Provides New 409A Guidance; New Proposed Regulations Provide Additional Clarity, Warn of Abusive Practices, and Present...

In Depth - Additional flexibility to use Section 409A exemptions - ..Expanded availability of the rules for transaction-based compensation for stock rights and incentive stock options. The final regulations allow...more

About Pink Cadillacs and SECA Taxes

Peterson v. Commissioner is a case that only a tax person could enjoy. It is a new opinion from the 11th Circuit, decided on May 24, 2016. The court’s opinion is 87 pages long and includes a strong dissent on the majority’s...more

IRS Issues Regulations Affecting Compensation Arrangements at Tax-Exempt Organizations

On June 21, the IRS issued long awaited proposed regulations under Section 457 of the Internal Revenue Code that affect a broad range of compensation arrangements at tax exempt organizations. If a compensation arrangement is...more

Summer Reading More Section 409A Guidance in the Form of Proposed Regulations

On June 22, 2016, the Department of Treasury and the Internal Revenue Service (the IRS) published proposed regulations (the Proposed Regulations) that clarify or modify certain specific provisions of the final regulations...more

Flexibility Offered for Deferred Compensation Plans of Tax-Exempt Organizations, Government Agencies

The U.S. Treasury Department has issued two sets of proposed regulations, under Sections 457 and 409A of the Internal Revenue Code, relating to deferred compensation plans of state and local governments and tax-exempt...more

Proposed Regulations Issued on Deferred Compensation Arrangements for Tax-Exempt Organizations

Today, Treasury and the IRS released proposed regulations under §457 of the Code, which governs the tax treatment of nonqualified deferred compensation paid to employees and independent contractors by tax-exempt organizations...more

Ninth Circuit Rules that Stock Rights Plan is Not Subject to ERISA

In a case of first impression in the Ninth Circuit, the Court held that the Booz Allen Hamilton, Inc. Stock Rights Plan (“SRP”) was not subject to ERISA because its primary purpose was not to provide deferred compensation or...more

Appellate Court Untangles Twelve Year Old Marital Settlement Agreement Regarding Pension

In a 2016 non-precedential appellate court decision, Grothey v. Grothey, the court attempted to untangle an agreement by husband and wife reached in 2004. The agreement provided that wife was to receive 65% of husband’s...more

IRS Audit Techniques Guide Provides Helpful Reminders for Sponsors of NQDC Arrangements

Last summer the Internal Revenue Service updated its Audit Techniques Guide (“ATG”) for nonqualified deferred compensation arrangements. While the ATG provides little instruction on how the IRS will review nonqualified...more

Disclaimer in Top-Hat Plan Could Save Millions for Employer

Do you have a top-hat plan? That’s a plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees...more

Courts Reject ERISA-Based Participation and Vesting Challenges to Top Hat Plans

ERISA Sections 201, 301 and 401 provide exclusions from ERISA's substantive protections for "top hat" plans, which are unfunded plans maintained by an employer primarily for the purpose of providing deferred compensation for...more

Get the basics on two federal bills affecting employee benefits

Recently, two bills with confusingly similar names were introduced in Congress. They are both worth mentioning regardless of whether or not they are ultimately enacted in their current form. The SAVE Benefits Act...more

FICA Lawsuit Settles For Over $3 Million

I have previously blogged about a lawsuit brought by participants in a nonqualified deferred compensation plan where the employer failed to report and pay FICA (social security) taxes in the most tax advantageous way. The...more

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