Section 4960: Tax on Excess Compensation – Tax-exempts and Beyond

Section 4960, as interpreted by recently published Treasury regulations, imposes a tax on compensation amounts exceeding certain thresholds paid to those performing services for most tax-exempt entities – potentially including amounts paid by for-profit employers. This new excise tax on excess compensation raised myriad questions and challenges, for both tax-exempt organizations and the for-profit organizations that are related to them. How broad is the scope of section 4960 and who is affected? Who are covered employees, whose compensation may be subject to tax? How are volunteers or similar service providers viewed under these new rules? What are the implications for a for-profit company and its affiliated foundation? Recent guidance, culminating in the release of final regulations last month help to shed light on some of the questions left unanswered by the statute.  

Please join us for a webcast on February 23rd, where KPMG professionals will discuss the implications of section 4960 and the newly issued final regulations, including: 

• What entities are affected by section 4960 and which service providers are considered covered employees;
• What compensation is (and isn’t) subject to the section 4960 excise tax;
• What planning and mitigation opportunities are available; 
• What changes were made by the final regulations; and 
• How employers determine and report their excise tax liability.