3/17/2024 0 Comments Irc 162![]() Background Section 162(m) imposes a $1 million limit on the allowable deduction for compensation paid to any "covered employee." Amounts that qualify as "performance-based compensation" are not counted towards the $1 million limit. ![]() To the relief of many public companies that had structured their incentive plans and awards in reliance on the IRS's prior position, Revenue Ruling 2008-13 will be given prospective application only, as described below. The new Revenue Ruling confirms the IRS's holding in Private Letter Ruling 200804004, released on January 25, 2008, which reversed the IRS's long-standing position on this issue. In Revenue Ruling 2008-13, issued on February 21, 2008, the IRS held that incentive pay cannot qualify as performance-based compensation under section 162(m) of the Internal Revenue Code if all or a portion can be paid upon the executive's involuntary termination without cause, voluntary termination for good reason or retirement, even if the executive continues in service and the incentive is actually paid upon attainment of the pre-stated performance goal. On the design or content of this material. Page, a World Wide Web demonstration project, no In the New York office of Pillsbury Winthrop ![]()
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