The United States Internal Revenue Service is a bureau of the United States Department of the Treasury. The IRS is charged with collecting revenue and enforcing the Internal Revenue Code.
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Earlier this year, the U.S. Court of Federal Claims addressed the application of Section 409A of the Internal Revenue Code ("409A") to discounted stock options in Sutardja v. The United States. As expected, the court...more
On August 29, 2013, the Treasury Department and the IRS issued Revenue Ruling 2013-17 (“Rev. Rul. 2013-17”) and updated Answers to Frequently Asked Questions for Individuals of the Same Sex Who Are Married Under State Law...more
The newness of the IRC Section 409A regulations governing deferred compensation is long-gone, but the complexities of this regulatory scheme remain burdensome and all should be vigilant to ensure compliance as penalties can...more
Recently the Employee Plans Compliance Unit (EPCU) of the Internal Revenue Service completed an informal compliance check of 401(k) plans conducted via an extensive written questionnaire sent to plan sponsors. ...more
Welcome to the inaugural edition of the Employment Law Insight, a service of the Employment Law practice group at Patton Boggs LLP...
...Why “Employment Law Insight”? Employers have available to them, and indeed are...more
If your company has been cavalier about Internal Revenue Code Section 409A, you should reconsider. In a recent opinion by the United States Court of Federal Claims, the IRS scored the first points – more than $5 million of...more
Court of Federal Claims agrees with the IRS position that section 409A applies to discounted stock options; holding is important for compensatory stock option grants.
On February 27, the U.S. Court of Federal Claims...more
My colleague Jeff Cairns blogged about a recent court case confirming the IRS’s position that discounted stock options can be considered noncompliant nonqualified deferred compensation arrangements under Section 409A of the...more
On January 2 , 2013, President Obama signed the American Taxpayer Relief Act of 2012 (H.R. 8) (the “Relief Act”) into law. While the principal intention of the Relief Act was to avert the key elements of the “fiscal cliff” by...more
The Internal Revenue Service has issued Proposed Regulations under Section 1411 of the Internal Revenue Code providing guidance on the 3.8% additional tax that will be imposed beginning January 1, 2013 on the “net investment...more
This Alert is designed to offer easy to understand and easy to implement year-end tax strategies in times of incredible tax uncertainty. This Alert is also designed to stimulate thought and inspire action during one of the...more
It is standard practice that employment agreements condition payment of severance benefits or other separation compensation on the employee executing a general release of claims against the employer. However, unless...more
Severance agreements and employment contracts with release of claims provisions may violate 409A of the Internal Revenue Code. Bad release provisions may be fixed, penalty-free, before December 31, 2012.
The Treasury Department and the IRS have provided favorable transition relief for correcting arrangements that impermissibly condition the payment of nonqualified deferred compensation on a service provider's completion of...more
As the end of the year approaches, important transition relief from penalties and excise taxes imposed by Section 409A of the Internal Revenue Code (the Code) is about to expire. If an employer has an employment agreement or...more
Internal Revenue Code Section 409A governs deferred compensation, which includes, with some exceptions, practically all agreements or plans in which an agreement is made in one year to pay an amount in a later year. Its most...more
By December 31, 2012, all deferred compensation arrangements in which payment is contingent on employee action, such as execution of a release of claims, must either include payment-timing restrictions that comport to IRS...more
Employers with employment agreements, severance policies, and other non-qualified deferred compensation agreements that contain language conditioning any payment on employee action, such as the execution of a release of...more
Employment, change in control, and severance agreements, as well as severance and deferred compensation plans, often condition payment upon the execution of a release or a noncompete or other employment-related condition. Any...more
Employers with employment, severance or other compensation arrangements with their employees should be aware the IRS has taken the position agreements that provide for payments, such as severance payments, that will be made...more
Companies commonly condition the payment of severance benefits upon the terminated individual's execution of an agreement containing a release of claims against the employer. Many release provisions permit a former employee...more
Employers preparing for year-end compliance efforts should be aware of a December 31, 2012 deadline for correcting a common problem in compensation arrangements subject to Section 409A of the Internal Revenue Code.
Background - Section 409A of the Internal Revenue Code (Section 409A) regulates the payment of non-qualified deferred compensation. If a plan or agreement is not otherwise exempt from Section 409A and does not comply with its...more
The Internal Revenue Service(IRS) has given employers until December 31, 2012 to correct a problem frequently found in severance agreements and other similar arrangements. If the problem is not addressed by that date, then it...more
Severance and other deferred compensation payments that are contingent on the execution of a release can in some circumstances result in a violation of Section 409A of the Internal Revenue Code. Section 409A governs the...more