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ARTICLE · 18 DECEMBER 2019

Proposed Regulations Clarifying Section 162(m)

Winston Taylor
Explore more from Winston Taylor

Yesterday afternoon, IRS released Proposed Regulations on the changes to Code Section 162(m) made by the Tax Cuts and Jobs Act of 2017 (to be published in the Federal Register on December 20).

United StatesEmployment and HR
Michael S. Melbinger
Michael S. Melbinger

Yesterday afternoon, IRS released Proposed Regulations on the changes to Code Section 162(m) made by the Tax Cuts and Jobs Act of 2017 (to be published in the Federal Register on December 20). The proposed regs follow up on Notice 2018-68, by which IRS provided guidance on these issues last summer. As we feared, but expected, it is mostly bad news. That is, the proposed regs confirm most of the unfavorable interpretations of Notice 2018-68. However, there are a few small bits of good news in the 129 pages of dense reading.

  • For compensation received pursuant to the substantial vesting of restricted property or the exercise of a stock option or stock appreciation right that does not provide for a deferral of compensation (under 409A), a modification of a written binding contract in effect on November 2, 2017, which results in a lapse of a substantial risk of forfeiture is not considered a material modification. With respect to other compensation arrangements, if an

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