Hot Off The Presses! Final Regulations Under Revised Section 162(m)

Of course, we all know that nothing says Merry Christmas and Happy Holidays like regulations from the IRS. And that is just what the executive compensation professionals community received today!

Readers doubtlessly recall the dark day when the Tax Cuts and Jobs Act of 2017 (TCJA) amended Code Section 162(m) to eliminate the performance-based compensation exception to the $1 million deductibility limit. Just over one year ago, the IRS and the Treasury Department released proposed regulations on the changes to Section 162(m) made by the TCJA. Today they released final regulations.

Based on my quick review, I have spotted only one item of good news so far. The final regulations provide that a corporation that was not a publicly held corporation and then becomes a publicly held corporation on or before December 20, 2019, may rely on the transition relief provided in §1.162-27(f)(1) until the earliest of the events provided in §1.162-27(f)(2). Furthermore, a