Nonprofit Compensation
Executive Compensation
McDermott provides experienced legal advice to tax-exempt organizations on the area of nonprofit executive compensation. Executive compensation has drawn increasing attention from the IRS, which has contacted and will continue to contact nonprofit organizations for detailed information about their executive compensation and benefits. Every tax-exempt organization that provides significant compensation and executive benefits to senior management should be prepared for greater scrutiny, as well as for possible IRS review of the documentation supporting the arrangements.
We advise clients on issues the IRS is likely to consider in its review, including board review of compensation, board members’ degree of independence, proper reporting of compensation and benefits on Form 990, and whether the board has taken the steps necessary to qualify for the “rebuttable presumption of reasonableness” under the intermediate sanctions rules.
Clients also receive advice on key questions to address before IRS contact occurs. These include the preparation and assembly of appropriate documentation to disclose, the valuing and reporting of deferred compensation arrangements, and information that is protected from disclosure by the attorney-client privilege.
Employee Benefit Planning
Our lawyers assist nonprofit organizations in the design and implementation of virtually all forms of qualified and non-qualified retirement and welfare benefit plans available under the law and consistent with intermediate sanctions guidelines. We also assist clients in the design of taxable and non-taxable fringe benefit programs for employees. Our experience includes extensive work on plan qualification issues, including single employer and multiple employer settings.
Employment & Excise Taxes
Employment taxes often are an unnoticed liability for nonprofit organizations. With increased frequency, issues are raised during audits on the appropriate classification (as employees or independent contractors) of professionals who provide services. Our lawyers, including those who handle employment tax issues, work with organizations to plan for proper job classification in the early stages of a transaction, minimize the incidence of employment tax liability and assist organizations when an employee/independent contractor classification is challenged. We also are involved in administrative and litigation controversies involving assessments of taxes and penalties for failure to withhold and/or pay employment tax liabilities. We have assisted many clients in reducing or abating tax liability through procedural, negotiation or litigation strategies, and through voluntary compliance programs established by the IRS.
Contacts
- Philip J. Castrogiovanni
+1 312 984 7693
Send E-mail - Ralph E. DeJong
+1 312 984 6918
Send E-mail
