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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

  • work Practice Area

    ERISA

Date & Time
  • event Date

    Wednesday, September 30, 2020

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$347.00

This course is $0 with these passes:

CLE
ALL

This CLE course will provide ERISA counsel and advisers an in-depth analysis of the executive compensation rules and challenges for tax exempt organizations. The panel will discuss key provisions of new IRS proposed regulations for Section 4960, determining covered employees, aggregation rules, and issues stemming from donated services. The panel will also discuss structuring restricted stock awards, drafting grant agreements, analyzing substantial risk of forfeiture under IRC Section 83, handling 83(b) elections, and more.

Faculty

Christopher N. Moran
Attorney
Venable LLP

Mr. Moran focuses primarily on tax planning and nonprofit law. Chris assists clients with planning significant charitable gifts and setting up new charitable entities. He also supports public charities, private foundations, educational institutions, healthcare organizations, and trade and professional associations on a broad array of tax and corporate issues.

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Jake R. Downing
Partner
King & Spalding LLP

Mr. Downing is experienced in counseling clients on qualified and nonqualified retirement and welfare plan matters regarding plan design and administration, fiduciary responsibility, claims procedures, disclosure requirements, and general ERISA compliance. He has assisted clients in drafting benefit plans and amendments including defined contribution plans, defined benefit plans, executive employment agreements, equity incentive plans, and health and welfare plans. Mr. Downing has conducted compliance audits on behalf of clients in order to proactively assess any potential liabilities, and he has experience representing clients before the IRS and U.S. Department of Labor.

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Description

Section 4960 imposes an excise tax on certain excess executive compensation paid by a tax exempt organization to certain covered employees. The IRS issued regulations under Section 4960 providing clarity to "covered employees" with some exceptions. ERISA counsel and advisers must recognize key provisions of the recent regulations, along with other considerations under Section 83, Section 162, and golden parachute rules.

Section 4960 imposes an excise tax equal to the corporate tax rate, which is currently 21 percent, on covered employee's pay that exceeds $1 million or is treated as an excess parachute payment. Recent IRS regulations provide exceptions to the application of Section 4960, such as the (1) limited hours exception, (2) nonexempt funds exception, and (3) limited services exceptions. All of which have strict requirements in order to avoid being subject to an excise tax.

Section 83 of the IRC and Treasury regulations govern the tax consequences of restricted property, including restricted stock awards. Under the recent regulations, the transfer of Section 83 property is considered a payment made in the taxable year in which it is transferred or would be includible in the gross income of the covered employee under Section 83, regardless of any election made by the employee under Section 83(b) or (i).

Counsel must understand the Treasury regulations to structure, draft, and implement restricted stock awards or other compensation arrangements.

Listen as our authoritative panel discusses important topics such as the impact of recent IRS regulations for Section 4960, substantial risk of forfeiture, income recognition, IRC Section 83(b) elections, withholding requirements, Section 162, and golden parachute rules.

Outline

  1. Executive compensation options for nonprofits
  2. Section 4960; recent regulations and applicability
  3. Applicability of Section 83 and 83(b) elections
  4. Integration of other tax provisions
  5. Best practices and practical considerations, practice pointers, and drafting tips for counsel

Benefits

The panel will review these and other key issues:

  • What are the key provisions of new IRS regulations for Section 4960?
  • What are the critical factors in determining "covered employees" for purposes of Section 4960?
  • How do the aggregation rules apply?
  • What issues arise from donated services?
  • What are the crucial implications of Section 83?
  • What issues arise in regards to Section 83(b) election and the latest guidance from the IRS?
  • How is restricted stock treated under other relevant provisions of the Code?
  • What are the practical considerations, practice pointers, and drafting tips for counsel?