Page 767 - Bruce Ellig - The Complete Guide to Executive Compensation (2007)

752 The Complete Guide to Executive Compensation

• Rev. Rul. 74–252. Severance payments are compensatory rights earning during employment
and therefore are subject to federal employment and income tax.
• Rev. Rul. 74–419. Decision by corporate directors to defer income before the year in which
earned does not result in constructive receipt.
• Rev. Rul. 79–328. Combined with Rev. Rul. 77–25 and Rev. Rul. 78–253, deals with when
payments may be excluded from FICA taxes.
• Rev. Rul. 80–300. Forfeiture of possible future appreciation can be a sufficient risk of
forfeiture to avoid constructive receipt.
• Rev. Rul. 80–350. Prescribes voluntary versus mandatory employee contributions to defined-
contribution plans.
• Rev. Rul. 80–359. Expands on Rev. Rul 68–454 and suggests that deferred compensation can
be considered pay for benefit purposes if all employees are eligible to defer compensation.
• Rev. Rul. 83–22. If a person makes a valid Section 83(b) election, dividends received are not
subject to tax withholding.
• Rev. Rul. 86–109. FICA taxes are due on payment if such occurs in year of participant’s death,
but not if paid in year following paticipant’s death.
• Rev. Rul. 92–64. Contains model rabbi trust and requires that the trustee be allowed some
investment discretion.
• Rev. Rul. 98–30. Employers are permitted to automatically enroll employees in the plan while
allowing employees to opt out of the plan.
• Rev. Rul. 00–33. Automatic deferral (without action by an employee) of a stated percentage of
pay does not cause the plan to fail qualification requirements.
• Rev. Rul. 01–06. Payments in redemption of stock held by an employee stock ownership plan
(ESOP) used to make distribution to terminating participants are not deductible.
• Rev. Rul. 03–47. State and local government length of service plans are taxable when paid or
made available without substantial limitation or restriction.
• Rev. Rul. 04–12. Rollover contributions to a pension plan may be distributed upon the
individual’s request.
• Rev. Rul. 05–39. Unvested stock on which a Section 83(b) election has been made is consid-
ered stock owned for purpose of determining whether or not there has been a change of con-
trol in the company. However, unvested stock on which a Section 83(b) election has not been
made is not considered stock owned for this purpose.
• Rev. Rul. 05–48. Except as otherwise provided by Section 83 of the Internal Revenue Code
(IRC), transfer restrictions on restricted stock or other Section 83 property do not prevent the
property from being substantially vested for purposes of Section 83.
Employee Benefits and Perquisites
• Rev. Rul. 73–13. The full value of financial services provided to an executive by the company
is income to the individual and tax deductible to the company.
• Rev. Rul. 76–448. Tuition fees paid on the behalf of key employees are considered income
when paid.
• Rev. Rul. 92–69. Outplacement services may or may not be considered gross income depend-
ing on whether or not employer received a benefit from such services.
• Rev. Rul. 94–24. To be tax-deductible the place must be the person’s principal place of business.
• Rev. Rul. 94–47. Transportation expenses between residence of taxpayer and normal location
are not tax deductible; however, such expenses between residence and a temporary work location
may be tax deductible.
• Rev. Rul. 97–20. Defines high-deductible health plans.
• Rev. Rul. 03–43. Debit and credit card records are sufficient documentation for medical
expense reimbursement.