The US Department of the Treasury has released long-expected proposed regulations regarding the section 4960 excise tax on certain remuneration or separation amounts paid to the five highest paid employees of a tax-exempt organization. The new proposed regulations continue the tough approach previously taken on section 4960 issues, while also providing some new exceptions and important clarifications.
Treasury/IRS Release Proposed Regulations on Section 4960 Excise Tax
By Ralph E. DeJong and Robert C. Louthian, III on June 25, 2020
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.
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.
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