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Showing posts from August, 2012

High Salaries can cause tax problems.

Tax Implications of High Salaries and Benefits     Rather than have perks come under scrutiny by shareholders, or in some other public forum, some organizations decide to simply pay higher salaries to executives.
However, different entities must be careful about paying salary and providing benefits that are considered "excessive" by the IRS because it can trigger an audit:
 Not-for-profit organizations - In recent years, the tax agency has focused auditors on tax-exempt organizations that pay excessive compensation and perks to officers and other insiders.
    The IRS has also revised its tax form filing procedures to ask more questions about financial arrangements with officers, directors, trustees, highly compensated employees, and highly compensated independent contractors (including certain related parties). The questions, according to the IRS, "capture information about potentially abusive transactions" and help determine whether amounts paid are appropriate and c…