U.S. Golden Parachute Rules in International Transactions: Sections 280G and 4999, Strategies to Avoid Tax Pitfalls

In the context of cross-border mergers and acquisitions, U.S. golden parachute rules for executive compensation must be considered in the transaction. Advisers and counsel must navigate Internal Revenue Code rules and other compensation regulations and address the key issues.

Golden parachute payments are governed by Sections 280G and 4999 of the Code. If applicable, these Code Sections generally impose a 20 percent excise tax on disqualified individuals for receiving excess parachute payments and deny of corporate deductions for such payments. Critical steps in determining the applicability and impact of the golden parachute rules include determining who are disqualified individuals, considering the nature of the compensation, whether, in fact, a change in control will occur, availability of shareholder approval as a remedy, mitigation planning where shareholder approval is not available, and other vital items.

Practitioners must fully understand these tax issues and other legal implications to avoid pitfalls in structuring and implementing the deal.

Listen as our authoritative panel of tax and executive compensation practitioners guides you through applying the golden parachute rules under IRC Sections 280G and 4999 to cross-border transactions and best practices for counsel to avoid tax pitfalls in structuring a deal.

1. Section 280G
2. Section 4999
3. Triggering events
4. Payments and change of control issues
5. Strategies for minimizing any adverse tax or legal consequences

The panel will review these and other vital questions:

• When do the golden parachute tax provisions apply in a cross-border transaction?
• What limits does IRC 280G impose on golden parachutes for executives?
• How does IRC 4999 apply, and what are the challenges?
• Who is a disqualified individual under the IRC?
• What are the implications of payments contingent on a change in control?
• What are critical strategies for minimizing any adverse tax or legal consequences?

Learning Objectives

After completing this course, you will be able to:

• Understand the golden parachute rules and limitations under Sections 280G and 4999
• Identify events that can trigger the golden parachute excise tax
• Ascertain strategies for minimizing any adverse tax or legal consequence when structuring transactions under Sections 280G and 4999

• Field of Study: Taxes
• Level of Knowledge: Intermediate
• Advance Preparation: None
• Teaching Method: Seminar/Lecture
• Delivery Method: Group-Internet (via computer)
• Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
• Prerequisite: Three years+ business or public firm experience advising the business or clients on executive compensation matters, at mid-level within the organization, supervising other preparers/accountants. Specific knowledge and understanding of IRS rules and regulations applicable to executive compensation packages, including equity compensation and nonqualified deferred compensation. Familiarity with ERISA, Treasury Regulations and IRS guidance relevant to tax implications for executive compensation structures.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).