IRS rules favorably on deferred compensation under section 457 for independent contractors
Article Abstract:
The IRS ruled in letter ruling 9809038 that independent contractors who are employed by a tax-exempt trade association which has a nonelective deferred compensation program for those contractors are not subject to taxation until in receipt of payments. The ruling is a favorable application of IRC section 457(e)(12). The subsection's special exclusion from the general recognition rule was aimed at doctors who are employed as independent contractors by tax-exempt organizations and whose retirement benefits exceed section 457 dollar limits.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1998
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Two wrap-around deferred compensation plans approved by IRS
Article Abstract:
The IRS issued two private letter rulings which allow contributions from nonqualified deferred employee compensation plans to qualified employee plans such as 401(k)s. Highly compensated employees are allowed to decide funding of qualified and nonqualified plans by means of elections at the beginning of the year. The Small Business Jobs Protection Act of 1996 made favorable changes which make this wrap-around method less attractive.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1998
User Contributions:
Comment about this article or add new information about this topic:
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