American Bar Association American Bar Association

Compensation Issues for Tax-Exempt Organizations

SPONSORS: The Sections of Business Law, Health Law, Labor and Employment Law, Real Property, Trust and Estate Law, Taxation, and Tort Trial and Insurance Practice; And the American College of Employee Benefits Counsel

General Information

A 90-minute TeleConference/Live Audio Webcast
THURSDAY, March 24

1:00-2:30 pm ET / 12:00-1:30 pm CT / 11:00 am-12:30 pm MT / 10:00 am-11:30 am PT 

Paul DeMuro
, Latham & Watkins LLP, San Francisco, CA

Nikole C. Flax
, Tax Law Specialist, Office of the Senior Technical Advisor, Tax Exempt and Government Entities, Internal Revenue Service, Washington, DC
Laura Gabrysch, Fulbright & Jaworski LLP, San Antonio, TX
Linda Ulrich, Buck Consultants, An ACS Company, Secaucus, NJ

Tax-exempt organizations cannot pay its directors or executives compensation that is unreasonable or excessive. Directors and executives that receive or approve unreasonable compensation are subject to excess benefit penalties. In worst case scenarios, the organization can lose its tax-exempt status. The level of compensation paid to nonprofit executives has been under scrutiny for several years, and will likely increase. In February 2009, the IRS released its Final Hospital Report, which analyzed the reported executive compensation practices of approximately 500 tax-exempt hospitals. The IRS has also sent out questionnaires to colleges and universities and hospitals, requesting, in part, detailed information about compensation levels and practices. A report similar to the Final Hospital Report will likely follow. Finally, the revised Form 990 requires detailed compensation reporting, and will require disclosure of certain compensation practices that may potentially embarrass an organization. Further, it is likely that the scrutiny will continue, especially in light of current economic conditions. This conference will provide an update on legislative and administrative efforts with respect to exempt organization compensation, highlight issues that may arise in awarding and reporting compensation, and provides suggestions for best practices with respect to compensation.

Compensation Issues for Tax-Exempt Organizations
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