The Law of Tax-Exempt Healthcare Organizations 2017 Cumulative Supplement, Fourth Edition + website

CHAPTER TWENTY‐EIGHTCompensation and Employee Benefits

1. § 28.5 Overview of Employee Benefits Law
2. *§ 28.6 Deferred Compensation in General
   1. (c) New Proposed Rules for 457(f) Plans

§ 28.5 OVERVIEW OF EMPLOYEE BENEFITS LAW

p. 793, note 54, first line. Delete § 28.1 and insert §§ 4.4(b) and 28.1.

p. 793, third paragraph. Insert footnote at end of last line:

1. 54.1 Bonuses can be seen as spikes in compensation that are forms of unreasonable compensation (e.g., Haffner's Service Stations, Inc. v. Commissioner, 326 F.3d 1 (1st Cir. 2003); Midwest Eye Center, S.C. v. Commissioner, T.C. Memo (2015‐53)).

*§ 28.6 DEFERRED COMPENSATION IN GENERAL

p. 802. Insert following existing text:

(c) New Proposed Rules for 457(f) Plans

On June 22, 2016, the IRS released the oft‐rumored, long‐awaited proposed regulations (the “Proposed Regulations”) regarding certain deferred compensation plans, commonly referred to by their Code designation as “457(f) plans” or “ineligible plans,” maintained by state or local governments or tax‐exempt organizations.⁸¹ The Proposed Regulations affect not only deferred compensation plans, but also supplemental executive retirement plans, certain split dollar insurance arrangements, and severance plans. While the Proposed Regulations did not deviate significantly from prior IRS guidance and prognostications as to what they would contain, they do offer greater clarity and certainty for executive compensation planning purposes.

Many charitable healthcare organizations ...