close
Share with your friends

Interim guidance, taxing “excess” executive compensation of exempt organizations

Interim guidance, taxing excess executive compensation

The U.S. tax reform legislation enacted in December 2017 (Pub. L. No. 115-97) created a new excise tax on certain employee compensation and severance payments paid by tax-exempt organizations.

1000

Related content

Section 4960 imposes an excise tax equal to the corporate tax rate (21%) on certain “remuneration” and “excess parachute payments” paid to the five highest compensated employees of certain tax-exempt organizations. Numerous defined terms used in section 4960 were—until recently—undefined or ambiguous, resulting in exempt organizations struggling during the past year in attempting to determine whether and to what extent they are subject to the excise tax. While imposition of the new excise tax under section 4960 has been challenging for these organizations, the uncertainty has been eased with the IRS issuance of Notice 2019-09 that addresses many key outstanding questions and concerns. 


Read a January 2019 report [PDF 133 KB] prepared by KPMG LLP: What’s News in Tax: Interim Guidance on Taxing “Excess” Executive Compensation of Exempt Organizations

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.KPMG International Cooperative (“KPMG International”) is a Swiss entity.

Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal