The IRS has released final regulations on executive compensation at tax-exempt organizations. Under the tax code, an applicable tax-exempt organization (ATEO) must pay a 21% excise tax on remuneration in excess of $1 million paid to a “covered employee,” plus any “excess parachute payment” paid to a covered employee during the tax year. An ATEO is an organization that is exempt from taxation under the tax code, is a farmers’ cooperative organization, has income excluded from taxation or is a political organization. The final regs restate certain statutory definitions and provide rules for determining the amount of excess renumeration. Contact us with any questions. Call or visit our website for more information! www.mjscpa.com/
