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LB&I EMPLOYMENT TAX PROGRAM October 8, 2010

LB&I EMPLOYMENT TAX PROGRAM October 8, 2010. LB&I. John Smith LB&I Employment Tax Specialist Smith.John@irs.gov 999-999-9999 X1001. EMPLOYMENT TAX PROGRAM. Heather Maloy – LB&I Commissioner Kathy Robbins - Director Field Specialist Howard Martin - Acting DFO (Deputy Director)

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LB&I EMPLOYMENT TAX PROGRAM October 8, 2010

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  1. LB&I EMPLOYMENT TAX PROGRAM October 8, 2010

  2. LB&I • John Smith • LB&I Employment Tax Specialist • Smith.John@irs.gov • 999-999-9999 X1001

  3. EMPLOYMENT TAX PROGRAM • Heather Maloy – LB&I Commissioner • Kathy Robbins - Director Field Specialist • Howard Martin - Acting DFO (Deputy Director) • Robin Arnold - National Program Manager • Kathy VanDeventer - ET Specialty Analyst • Walter Hall - ET Manager

  4. Employment Tax Program • Total 9 ET Groups Nationwide • Group 1164, total 8 ET Specialists working in So. Calif. Area that covers • San Diego • Santa Ana • Long Beach • El Segundo • Glendale

  5. ROLE OF LB&I ET SPECIALIST • Informal Request • Consulting • Compliance • LB&I Cases – CIC & IC

  6. ROLE OF LB&I ET SPECIALIST Informal Request • Quick questions answered • Quick guidance provided

  7. ROLE OF LB&IET SPECIALIST Consulting • Maximum time = 8 hours • Background Research – SEC filings (Annual Report 10K, Proxy Statement 14A, F-4s, and / or Company Website) • ET Specialist suggested IDR issued by TC / responses reviewed by ET Specialist • Provide guidance • IDRS (INOLE, BMFOLU, TRPRT, BRTVU, etc.) • Reject / Accept?

  8. ROLE OF LB&IET SPECIALIST Compliance • Executive Compensation • Number of employees affected • Dollar amount

  9. ROLE OF LB&IET SPECIALIST LB&I Cases – CIC & IC • Executive Compensation • Salary & Wages

  10. Schedule M-3, Form 1120

  11. LB&I Cases – CIC & IC Executive Compensation • Key Executive Benefits • Stock Based Compensation • Non Qualified Deferred Compensation • Golden Parachute

  12. Executive Compensation Key Executive Benefits • Search executive benefits from 10 K, 14A, employment contract, Compensation Committee Minutes, IDR response…

  13. Executive Compensation Stock Based Compensation • Non Qualified Stock Options • Incentive Stock Options (ISO) / Backdated Stock Options • Stock Appreciation Right (SARs) • Restricted Stock §83

  14. Executive Compensation Non Qualified Deferred Compensation §409A • Executives Deferred Compensation under NQ Plan • Restrictive Use? • Section 83 • Funded / Unfunded? • Rabbi Trust

  15. Executive Compensation Golden Parachute §280G • Change in control • Large payments that are in the nature of compensation • made to or for the benefit of a “disqualified individual” • aggregate present value is equal to or greater than three times the "base amount"

  16. LB&I Cases – CIC & IC Salary & Wages • Expatriates • Relocation Benefits • Per Diem Payments and Other • Prizes and Awards • Employment Litigation & Settlement • Severance • Bonus • W-2 and Form 1099 Matching • Worker Reclassification, Section 530 • Other Employee Benefits

  17. Referrals • Specialist Referral System (SRS) • Submit Referral with LIN link • ET Manager Reviews • Consulting, Reject, Accept • formal Referral

  18. Referral AcceptanceET Specialist Will: • Examination of selected Payroll return (940, 941, 945) • Open and own case in IMS • Martinsburg files W-2 & 1099 requested • Review LIN link • Analyze Schedule M-3 for ET issues • SEC Filings (10K, 14A, etc.) • IDRS – BMFOLU, INOLE, TRPRT, RTVUE, etc. • Review IDR response (Consulting Referral) • Technical Guidance

  19. Referral Reject • Limited Resources • Limited time • Lack issue potential • TC can resubmit at a later time

  20. Mandatory Review – Officer Returns • IRM 4.46.3.6.7 – Debbie Nolan Memo • Review 1040 Return or TRPRT • CEO and top highest paid officers • DON’T request from TP (1120, 1120s, etc.) • DON’T inform the TP (1120, 1120s, etc.) that you are requesting officer returns. • Letter 3996 (officer letter) • 1040 Examinations – LB&I TC or Refer to SBSE

  21. TEAM COORDINATOR’S TO DO LIST Prior to the ET Specialist’s arrival the following should be present: • LIN link • M-3 work papers • Response to ET suggested IDR (Issued by TC during consulting phase) • CAS - Accounts Payable files (cash disbursements) / Vendor Analysis • Key Officer tax returns (CEO & top highly paid officers) • Access to BOD Minutes / Compensation Committee Minutes (immediately following the ET Specialist arrival)

  22. The End

  23. Question?

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