One of the more controversial and complex provisions of the Tax Cuts and Jobs Act has been the 21 percent excise tax on certain nonprofit executive compensation. On December 31, 2018, the IRS issued interim guidance that addresses how this tax will apply in various situations that commonly arise for tax-exempt employers. Establishing internal systems to comply with this guidance will be challenging.
Top Takeaways for Tax-Exempts from IRS Guidance on Executive Compensation
By Robert C. Louthian, III, Andrew Liazos, Erika Mayshar, Joseph K. Urwitz and Ralph E. DeJong on January 10, 2019
Posted In Employee Benefits, Executive Compensation
Tags: Covered Employees, dual-qualified organizations, excise tax, governmental entities, high five employees, interim guidance, Internal Revenue Code, nonprofit executive compensation, nonprofit health systems, Notice 2019-09, parachute payments, Section 4960, Tax Cuts and Jobs Act, tax reform, Tax-exempt employers
Robert C. Louthian, IIIRobert C. Louthian, III, represents exempt organizations on a wide range of tax and related issues, including determinations of exempt status, securing private letter rulings on proposed transactions, and preparing and representing clients who are under audit by the Internal Revenue Service. He works primarily with hospitals and other institutional providers, private foundations, scientific research organizations, universities, trade associations and corporate foundations. Robert has extensive experience in the formation of provider networks, integrate delivery systems, conversions of tax-exempt organizations and joint ventures with tax-exempt participants. Read Robert Louthian's full bio.
Andrew LiazosAndrew C. Liazos is the global chair of McDermott’s Benefits & Compensation Practice Group and has practiced at McDermott for over 25 years. Andrew focuses his practice on compensation and benefit matters, including related securities, M&A, IPO, private equity, international and litigation matters. Clients range from Fortune 500 companies to compensation committees to individual executives in employment and severance negotiations. Read Andrew Liazos' full bio.
Erika MaysharErika Mayshar provides tax planning advice for business entities and tax-exempt organizations. Her clients include hospitals and health systems, medical foundations, universities, corporate and family foundations, and trade associations, as well as private equity firms, investment management firms and closely-held businesses seeking to partner with nonprofits in creative ways. Read Erika Mayshar's full bio.
Joseph K. UrwitzJoseph (Joe) K. Urwitz focuses his practice on employee benefits, executive compensation and Employee Retirement Income Security Act (ERISA) fiduciary matters. He advises clients on a wide range of issues, including fiduciary duties and prohibited transactions, employee benefit matters arising in mergers and acquisitions, benefits issues unique to nonprofit entities, deferred compensation arrangements, equity award and bonus plan design, employment and severance arrangements, and qualified plan work. Read Joe Urwitz's full bio.
Ralph E. DeJongRalph E. DeJong advises clients on the compensation, executive benefits and employee benefits of tax-exempt organizations. He provides counsel on designing and preparing deferred and incentive compensation arrangements, leading governing boards in the review and approval of executive and physician compensation arrangements, negotiating and preparing executive and physician employment agreements, and analyzing the private inurement and intermediate sanctions implications of executive and physician compensation and benefit arrangements. Read Ralph DeJong's full bio.
Related Posts
- Tax Reform Surprises and Strategies with the New 162(m) Rules
- How the Tax Act Upsets the Board/Executive Compensation Committee Dynamic
- Tax Reform Bill Becomes Law: Lessons for Tax-Exempt Organizations
- Treasury/IRS Release Proposed Regulations on Section 4960 Excise Tax
- What Employers Need to Know About 162(m)
BLOG EDITORS
STAY CONNECTED
TOPICS
ARCHIVES
RECENT POSTS
- Employee Benefit Plans: Important Considerations for Year-End and 2025
- Post-Election Outlook: Issues to Watch for Pharmacy Industry Stakeholders
- Post-Election Health Policy Priorities
- IRS Issues Proposed Regulations to Ensure Expanded Preventative Care Services Coverage
- Will the Affordable Care Act Survive a Trump Presidency?
