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The IRS is turning its attention on Not-For-Profit organisations in their pursuit of excessive executive compensations. The warning comes from Compensation Resources.

Citing the Sarbanes-Oxley Act, FASB requirements on stock options and SEC rules, the company claims are aimed at public companies, NFPs are also at risk.

In a recent article in The CPA Journal(1), the authors indicated, "The IRS intends to aggressively enforce section 4958, and the related regulations." Further it indicated, " ... the IRS was 'seeing issues' in the reporting of loans, deferred compensation, and other perks." The recent changes to section 457(f), which requires that at retirement, all deferred compensation arrangements, including annuitized supplemental executive retirement plans (SERPs), become fully taxable, further exacerbates the issue. Under the new rules, the amount of the deferred compensation shows up as part of the annual Total Compensation Package (TCP), but is again shown as part of total compensation in the year of retirement.

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Sarbanes-Oxley Items

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Keywords

not for profit

IRS

Sarbanes-Oxley and IRS

executive compensation

Compensation Resources

CPA Journal

457

SERPS

retirement plans

total compensation package