Internal Revenue Service Executive Compensation

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.  
News & Analysis as of

IRS Limits Correction Opportunities under Section 409A Proposed Income Inclusion Regulations and Imposes 20% Penalty

In Chief Counsel Advice 201518013 (May 1, 2015) (the "CCA"), the IRS addresses an executive retention bonus that originally vested after three years and was payable in equal installments on the first two anniversaries of the...more

IRS Rules Retention Arrangement Violates 409A

In a Chief Counsel Memorandum issued last month, the IRS concluded that an executive retention arrangement violated Section 409A despite the employer’s efforts to correct the arrangement before the retention bonus vested....more

Chief Counsel Memorandum Clarifies IRS Position on Informal 409A Corrections

On May 1, the IRS released a Chief Counsel Memorandum that clarifies the IRS’ position with respect to the correction of deferred compensation arrangements outside of the IRS’ formal Section 409A correction programs....more

Does Your Retention Bonus Plan Violate IRS Code?

In a memorandum released earlier this month, the IRS Office of Chief Counsel ruled that a retention bonus payable to an executive violated Section 409A of the Internal Revenue Code ("409A"). The IRS further ruled that the...more

IRS Chief Counsel Memorandum Clarifies that Correction of Section 409A Failures in Year of Vesting Will Not Shield Income...

Earlier this month, the Office of Chief Counsel of the Internal Revenue Service released a Memorandum clarifying the impact of a correction of a Code Section 409A operational failure before the date of vesting of nonqualified...more

The Importance of Fixing Section 409A Compliance Failures Sooner Rather Than Later

A recent Memorandum issued by the Office of Chief Counsel within the Internal Revenue Service demonstrates yet again the perils of failing to comply with Section 409A of the Internal Revenue Code. The Memorandum takes the...more

IRS Publishes Final Regulations Under Section 162(m)

On March 31, 2015, final regulations of Internal Revenue Code Section 162(m) were published. The final regulations clarify exceptions to the US$1 million annual limit on deductions allowable to publicly held corporations for...more

IRS Addresses Interaction of Performance Compensation and $1M Compensation Deduction Cap

The IRS recently issued final regulations under Section 162(m), which limits a public company’s deduction of executive compensation in excess of $1M.  The Section 162(m) limits do not apply to performance-based compensation...more

IRS Releases Clarifying 162(m) Regulations

The IRS recently released final regulations clarifying two aspects of the “performance-based compensation” exception to the $1,000,000 limit on deductible compensation paid to covered employees under Section 162(m) of the...more

Executive Compensation Alert: IRS Releases Final Section 162(m) Regulations

Background - Section 162(m) of the Internal Revenue Code (the “Code”) denies a tax deduction to a public company if the compensation paid to its chief executive officer and three other highest compensated officers...more

A Phantom Menace for IPO Companies - US Tax Regulations Restrict the Use of Restricted Stock Units

Section 162(m) of the Internal Revenue Code (“Section 162(m)”) provides for a $1 million dollar limitation on the amount of compensation paid to each of certain named executive officers that public companies may deduct in any...more

IRS Provides Limited Section 162(m) Transition Relief for RSUs and Similar Equity-Based Awards

The Internal Revenue Service (IRS) recently issued final regulations under Section 162(m) of the Internal Revenue Code (Code). The final regulations are substantially similar to the proposed regulations issued by the IRS in...more

Locke Lord QuickStudy: IRS Clarifies Performance-Based Compensation Exception Under Code Section 162(m)

On March 31, 2015, the Internal Revenue Service (IRS) published final regulations under Section 162(m) of the Internal Revenue Code (the Code). Code Section 162(m) disallows a deduction by any publicly-held corporation for...more

IRS Releases Amended Section 162(m) Regulations Clarifying How to Preserve the Deductibility of Certain Compensation for Public...

The Internal Revenue Service recently amended the regulations under Internal Revenue Code Section 162(m). Section 162(m) applies to publicly held companies and generally limits the tax deduction that a public company is...more

Section 162(m) Final Regulations Clarify Requirements for Exemptions to $1 Million Deduction Limitation

Section 162(m) generally limits to $1 million the amount that a public company can annually deduct with respect to remuneration paid to certain covered employees. This deduction limitation, however, does not apply to...more

Final IRS Regulations Under Section 162(m) Will Impact Transition Rule Applicable to Newly Public Companies

On March 31, 2015, the IRS issued final regulations under Section 162(m), the tax code provision which limits the deduction for compensation paid to certain public company executive officers. As signaled by the proposed...more

Internal Revenue Code Section 162(m) Compliance Alert

As we start the New Year, publicly traded corporations should begin reviewing their compensation plans/arrangements to ensure that compensation that is intended to qualify as performance-based compensation satisfies the...more

Executive Compensation Continues to be a Hot Button Compliance Issue for Charitable Organizations

Over the last decade, the IRS has assumed a broader role in the governance of tax-exempt organizations and embraced the view that transparency leads to tax compliance. Nowhere is the IRS s approach more evident than in the...more

Compensation Issues – Revisited

We have completed another retirement plan audit season and have noticed a number of common errors occurring with compensation. I previously discussed these issues in my blog series “Compensation: The Missing Link – Part 1”...more

An Appreciation for Hedging Your Bets on Deferred Compensation: IRS Issues Revenue Ruling 2014-18 Under Section 457A of the...

Under Section 457A of the Internal Revenue Code of 1986 (the “Code”), certain offshore and other entities are limited in their ability to provide tax-effective deferred compensation to providers of services to those entities....more

"Executive Compensation and Benefits Alert: IRS Section 409A Audit Initiative May Signal Increased Enforcement Activity"

Since the adoption of Section 409A of the Internal Revenue Code, employers and practitioners have wondered when and how the IRS would enforce it. With the recent IRS announcement of an audit initiative with respect to Section...more

The ERISA Litigation Newsletter - April 2014

This month we discuss the evolving case law on the issue of whether unpaid employer contributions due under a collective bargaining agreement can be viewed as plan assets such that the individuals who decide to withhold such...more

Tax Alert: New Executive Compensation Regulations Clarify Timing of Taxation

The Internal Revenue Service recently published final regulations under Section 83 of the tax code. These regulations deal with the timing for taxation for grants of property (e.g., stock) that are subject to...more

Camp Tax Reform Proposal Could Impact Executive Compensation

On February 26, 2014, U.S. House of Representatives Committee on Ways and Means Chairman Dave Camp (R-MI) released the proposed Tax Reform Act of 2014 (the Camp Proposal), which would simplify the Internal Revenue Code and...more

Recent Developments and Trends for Exempt Organizations

2013 was something of a lost year for the Exempt Organizations (EO) Division of the IRS. In the spring, the Division was embroiled in a controversy involving the targeting of conservative advocacy groups that led to the...more

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