Ruth Wimer

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Section 162(m) Final Regulations Clarify Requirements for Exemptions to $1 Million Deduction Limitation


By , and on Apr 14, 2015
Posted In Executive Compensation

On March 31, 2015, IRS issued final regulations clarifying that stock options and SARs will only qualify as performance-based compensation if granted under a stockholder-approved plan that includes an individual limit on the number of such awards that may be granted during a specified period. In addition, only certain types of stock-based compensation are eligible...

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IRS Ruling Allows Tax-Deferred Stock Rights for Fund Managers


By and on Jul 17, 2014
Posted In Retirement Plans

Revenue Ruling 2014-18 holds that stock options and stock-settled stock appreciation rights (stock rights) granted by offshore funds and other entities domiciled in tax-indifferent jurisdictions can be structured to avoid immediate taxation under Section 457A of the U.S. tax code. Among other things, this ruling allows an offshore fund to compensate its managers with stock...

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IRS Releases Final Instruction for Form W-8BEN-E


By , , and on Jun 27, 2014
Posted In Retirement Plans

In March 2013, the Internal Revenue Service (IRS) issued the final version of Form W-8BEN-E Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting.  This form allows certain non-U.S. retirement plans to claim exemption from the reporting and withholding requirement of the Foreign Account Tax Compliance Act (FATCA).  However, the...

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June 30 Deadline Approaches for Mandatory E-File FBAR Reporting


By , , and on Jun 25, 2014
Posted In Fiduciary and Investment Issues

2014 presents particular challenges with respect to FBAR, the Report of Foreign Bank and Financial Accounts, for certain U.S. persons with interests in or signature authority over assets exceeding $10,000 held outside the U.S. in foreign accounts.  The deadline for calendar year 2013 reporting obligations is June 30, 2014, and by then all taxpayers must e-file...

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Supreme Court Decides in Favor of IRS in Quality Stores: FICA Generally Applies to Severance Payments


By , and on Mar 27, 2014
Posted In Benefit Controversies

The Supreme Court of the United States has decided in favor of the Internal Revenue Service in United States v. Quality Stores, Inc., holding that severance payments made pursuant to plans that did not tie payments to the receipt of state unemployment insurance are subject to Federal Insurance Contributions Act (FICA) tax.  The decision overturns a...

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Deadline Looms for Quality Stores FICA Refund Claims for Severance Payments


By , and on Feb 13, 2014
Posted In Employment

The Supreme Court of the United States recently heard arguments in its review of the U.S. Court of Appeals for the Sixth Circuit’s Quality Stores decision.  At issue in Quality Stores is whether certain severance payments made to employees following an involuntary separation, but which are not linked to state unemployment benefits, are “wages” subject to Federal Insurance Contributions...

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Employer Obligations for Additional Medicare Tax


By and on Dec 10, 2013
Posted In Health and Welfare Plans

The Internal Revenue Service recently released final regulations and updated questions and answers to help employers and taxpayers comply with the new 0.9 percent Medicare payroll tax increase on high-income earners that became effective in 2013. Employers are responsible for withholding and reporting the increased payroll tax and may be liable for amounts that are...

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Recent Case Opens Door to Civil Enforcement Claims for Negligent FICA Tax Withholding


By and on Nov 26, 2013
Posted In Benefit Controversies, Employment, Retirement Plans

A District Court in Eastern Michigan recently rejected a motion to dismiss a participant’s benefit claim, holding that an employer legally could be liable to a participant in a nonqualified deferred compensation plan when the employer did not properly withhold FICA tax in the manner most advantageous to the participant. As a best practice, plan...

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IRS Guidance on Employment and Income Tax Refunds on Same-Sex Spouse Benefits


By , and on Oct 22, 2013
Posted In Employment, Health and Welfare Plans, Retirement Plans

Employers extending benefit coverage to employees’ same-sex spouses and partners should review their payroll procedures to ensure that such coverages are properly taxed for federal income and FICA tax purposes. Employers also should review the options in Notice 2013-61 and consider filing claims for refunds or adjustments of FICA overpayments. To read the full article,...

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