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Excise Tax Problems? Retirement Compensation May Help

By Lowell Walters · June 12, 2018, 5:30 PM EDT

All entities, including governmental entities,[1] are now potentially liable for overpaying higher-ranking employees. For-profit companies have been at risk for losing their tax deduction for excessive salaries, with publicly traded companies subject to a specific $1 million limit [2] and certain nonprofit organizations have been at risk for “intermediate sanctions.”[3] Effective Jan. 1, 2018, the Tax Cuts and Jobs Act created an excise tax with newly enacted Internal Revenue Code Section 4960, to be imposed on tax-exempt organizations and governmental entities. At first glance, this section — titled “Tax...

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