An Encore 'Performance' from the IRS - Severing Deductions Under Section 162(m)

36 Tax Management Comp. Pl. J. 52 (3/7/08), reprinted in BNA Tax Management Memorandum (9/28/08)

7 Pages Posted: 2 Nov 2016 Last revised: 3 Nov 2016

See all articles by Andrew L. Oringer

Andrew L. Oringer

Dechert LLP; Hofstra University - Maurice A. Deane School of Law

Stacy DeWalt

White and Case

Date Written: March 7, 2008

Abstract

The question of whether under Section 162 (m) of the Internal Revenue Code a compensation plan can pay out performance-based compensation in the event of a termination without cause, and still be a valid performance-based plan under Section 162 (m), can be a difficult and nuanced question. Early IRS private rulings indicated "yes" and a later IRS Revenue Ruling says "no". This article explores the evolution of the authority, and sets forth proposed approaches for designing arrangements in light of this issue.

Suggested Citation

Oringer, Andrew L. and DeWalt, Stacy, An Encore 'Performance' from the IRS - Severing Deductions Under Section 162(m) (March 7, 2008). 36 Tax Management Comp. Pl. J. 52 (3/7/08), reprinted in BNA Tax Management Memorandum (9/28/08), Available at SSRN: https://ssrn.com/abstract=2860746

Andrew L. Oringer (Contact Author)

Dechert LLP ( email )

1095 Avenue of the Americas
New York, NY 10036-6797
United States
212-698-3571 (Phone)

HOME PAGE: http://www.dechert.com

Hofstra University - Maurice A. Deane School of Law ( email )

121 Hofstra University
Hempstead, NY 11549
United States

Stacy DeWalt

White and Case ( email )

Miami, FL
United States

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