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Tax Rules - General Principles re Executive Compensation

    > see also: IRS correction program (for tax-qualified retirement plans)

Relevant Code Sections

• Code Section 83 re compensatory property transfers
  
  • ​​See Substantial Risks of Forfeiture
    
  • New Section 83(i) -IRS Notice 2018-97(initial IRS guidance)
    
  • Rev. Rul. 60-31 re mere promise to pay does not trigger constructive receipt.
    
• Code 132 - Executive Travel and Security
• Code Section 162(m) re $1M deduction limit for top public company executives
  
• Code Section 280G re golden parachute rules
  
• Code Section 409A re deferred compensation​
  
• Code Section 422 re Incentive Stock Options
  
  • ​See Stock Option Grant Date for information focused on those issues.
    
• ​Code Section 451 and Constructive Receipt (see this article with extensive case cites)
  
• Code 3121 - see withholding rules.
  

Special Issues

• Compensatory Loans to Employees - Bachelder 2001 Article re IRS Tech Advice Memo 200040004 (10/6/2000).
• Constructive Receipt
  
  • ​​Comprehensive white paper with extensive case cites (from 2008).
    
• Controlled Group Determinations - discussed here.
  
• Merger & Acquisition Issues, such as Earn-outs - discussed here.
  
• Reasonable Compensation - required for Code 162 deduction.
  
  • ​​See Navigating Tax Risks In Shareholder-Executive Compensation (by Natasha Perssico Escobedo, BNA 9/27/2018). For a copy, send email request.
    
• Withholding Rules - discussed here.
  

​New Developments:

• 2012  Section 83(b) Elections. In Revenue Procedure 2012-29, the IRS elaborated on Code Section 83(b) election procedures by providing a model election form and a number of examples explaining the consequences of making a Code Section 83(b) election. ​