Philadelphia associate Mark Simons co-presented Bloomberg BNA’s “Unique Challenges of Compensating Executives in Tax Exempt Organizations” webinar on Tuesday, Feb. 14.
Tax-exempt employers face special challenges when designing nonqualified deferred compensation plans. The dual applicability of and interplay between sections 457(f) and 409A of the federal tax code pose complex issues, heightened by the lack of definitive guidance. Additional issues are presented by special reporting and other requirements, all in face of increased IRS scrutiny and audit activity in this area.
Mark and the other panelists discussed the design of nonqualified plans for tax-exempt entities, the applicable requirements under section 4958 (intermediate sanctions), the constraints on their design imposed by sections 457(f) and 409A, and how to make sure a compensation arrangement is both effective and compliant.