On December 16, 2019, the IRS issued proposed
regulations under Section 162(m) of the Internal Revenue Code
(the "Proposed Regulations"). The Proposed Regulations
respond to comments made on Notice 2018-68 (the "Notice"), which
provided initial guidance on the application of Section 162(m) in
light of amendments made by the Tax Cuts and Jobs Act (the
"Act").1 In general, the Proposed Regulations
clarify: (1) the revised definitions of "covered
employee," "publicly held corporation" and
"applicable employee compensation"; and (2) the
application of the amendment's transition rule (commonly
referred to as the grandfathering rule).
The IRS is scheduled to publish the Proposed Regulations in the
Federal Register on December 20, 2019, upon which date a 60-day
comment period will commence. The public hearing to discuss the
Proposed Regulations is scheduled for March 9, 2020 at 10 a.m.
