PLR Regarding Section 162(m)

02/07/2008

The Internal Revenue Service (IRS) just released Private Letter Ruling 200804004 (the “2008 Ruling”), in which the IRS ruled that performance-based compensation is not exempt from the $1,000,000 cap on deductible pay under Code section 162(m) in any circumstance, other than for death, disability, or change of control where it could be paid to the executive without achievement of the specified performance goals.

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