Ninth Circuit reverses itself in Albertson's
Article Abstract:
The US Court of Appeals for the Ninth Circuit reversed its own ruling of a year earlier in Albertson's, Inc. v. Commissioner and found that funds in a nonqualified deferred compensation that were designated as interest were not deductible to the employer until payable to the employee. The Court decided to treat the interest the same as compensation because to do otherwise would provide employers with the incentive to use artificially high interest rates to maximize deductions. The Court also feared that this loophole would discourage use of qualified plans and encourage use of nonqualified plans.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
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National Office indicates new approach to taxing split-dollar life insurance
Article Abstract:
The IRS National Office has ruled in Technical Advice Memorandum 9604001 that employees covered under paid-up split-dollar life insurance policies should be taxed on both the one year term cost and the build-up during the year of the surrender value to the extent it exceeds the premium amounts to be returned to the employer. Gift tax liability may attach to the extent these amounts are gifts from the employee to the trust. This IRS opinion has no precedential value and is limited to the single paid-up premium context, but it might suggest future IRS action.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1996
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Albertson's, Inc. seeks a second rehearing
Article Abstract:
The US Court of Appeals for the Ninth Circuit ruled in Albertson's v. Commissioner that interest accrued in the deferred compensation plan of Albertson's employees must be treated as compensation, reversing a prior ruling in favor of Albertson's. The Ninth Circuit had found in its 1993 ruling that the interest was deductible to Albertson's. Albertson's has requested that the Court hear the case a third time based on misstatements by the IRS and the need to resolve the issue.
Publication Name: Tax Management Compensation Planning Journal
Subject: Law
ISSN: 0747-8607
Year: 1995
User Contributions:
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