The U.S. Treasury Department and IRS this afternoon released for publication in the Federal Register final regulations (T.D. 9938) concerning the excise tax imposed regarding excess tax-exempt organization executive compensation.
Read the final regulations [PDF 436 KB] (47 pages) as published in the Federal Register on January 19, 2021.
These regulations implement section 4960 as added to the Code by the 2017 tax law (Pub. L. No. 115-97)—the law that is often referred to as the “Tax Cuts and Jobs Act” (TJCA). Section 4960 imposes an excise tax on remuneration in excess of $1 million and any excess parachute payment paid by an applicable tax-exempt organization to any “covered employee.” Section 4960 is effective for tax years beginning after December 31, 2017.
The IRS on January 11, 2021, posted a version of these final regulations to its website. That version of the final regulations included the following statement:
This document will be submitted to the Office of the Federal Register (OFR) for publication. The version of the final rule released today may vary slightly from the published document if minor editorial changes are made during the OFR review process. The document published in the Federal Register will be the official document.
Read a KPMG report providing initial impressions about the final regulations (based on the version of the regulations posted by the IRS on January 11, 2021): TaxNewsFlash
Read a computer-generated document [PDF 1.5 MB] that provides a comparison of the version of the final regulations submitted this afternoon for publication in the Federal Register against the version posted by the IRS on January 11, 2021. This unofficial document was produced by KPMG for the purpose of showing what changes, if any, were made to the regulations prior to being released to the Federal Register for publication. It has not been reviewed for accuracy.
For more information, contact a tax professional with KPMG’s Washington National Tax practice:
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