Excise Tax Update: Recent IRS Changes and Proposed Regulations

July 23, 2020 | 2:00pm - 3:00pm ET

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About the Webinar

The 2017 Tax Cuts and Jobs Act included a new Section 4960 that levied an excise tax on tax-exempt entities like credit unions. The excise tax, paid by the credit union, applies for covered employees on (1) remuneration in excess of $1 million and (2) excess parachute payments for highly-compensated employees. As expected with such wide and sweeping legislation, there were points of Section 4960 that needed further clarification. Until final regulations could be issued, the IRS allowed an organization to use its own reasonable, good faith interpretation of the statutory rules and guidance provided in IRS Notice 2019-09. 

Recently, the IRS issued proposed regulations which provide needed clarifications and some new exceptions. While the proposed regulations are consistent with much of the previously issued guidance, the nuances of the new guidance and general complexity of the rules warrant careful review to ensure a credit union is fully prepared for compliance. Join us as we walk through the proposed regulations to understand the impact on your credit union’s bottom line. 

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Presented By

James Patterson
James Patterson

Partner | Sherman & Patterson, Ltd.

Jim is a partner with Sherman & Patterson, a law firm focusing in the areas of tax, nonqualified deferred compensation (e.g., 409A and 457(f)) and employee benefits. Most of his deferred compensation clients are credit unions and healthcare systems. Jim has worked closely with state credit union regulators in the 47 states that have state credit union charters, as well as with regulators at the National Credit Union Administration.

Jim has drafted numerous split dollar plans, SERPs, and other nonqualified deferred compensation arrangements and welfare benefits plans. After Congress passed 409A and the IRS published 409A regulations, Jim focused significant time in updating deferred compensation arrangements to comply with those new rules. Jim’s practice also includes drafting employment agreements and severance plans that integrate nonqualified deferred compensation concepts with other issues relating to an individual’s employment.

Gallagher Benefit Services, Inc., a subsidiary of Arthur J. Gallagher & Co., (Gallagher) is a non-investment firm that provides employee benefit and retirement plan consulting services to employers. Securities may be offered through Kestra Investment Services, LLC, (Kestra IS), member FINRA/SIPC. Investment advisory services may be offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Certain appropriately licensed individuals of Gallagher are registered to offer securities through Kestra IS or investment advisory services through Kestra AS. Neither Kestra IS nor Kestra AS are affiliated with Gallagher. Neither Kestra IS, Kestra AS, Gallagher, their affiliates nor representatives provide accounting, legal or tax advice.