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Adding Insult To Injury: The Federal Income Tax Consequences Of The Clawback Of Executive Compensation, Matthew A. Melone
Adding Insult To Injury: The Federal Income Tax Consequences Of The Clawback Of Executive Compensation, Matthew A. Melone
Akron Tax Journal
Part I of this article discusses and analyzes clawbacks in general, including clawbacks that are part of common-law remedial schemes, federally legislated clawbacks, and those triggered by contractual clawback provisions. Part II of this article analyzes the tax consequences to the executives that result from the repayment or forfeiture of compensation. This part provides an analysis of the annual accounting concept and the claim-of-right doctrine which will generally result in the payment and return of compensation to be accounted for in separate tax years and, concomitantly, will generally result in incongruent tax consequences. The exceptions to the annual accounting concept …
Dominion Resources: Powering Section 1341 Toward Equity?, Edward J. Schnee
Dominion Resources: Powering Section 1341 Toward Equity?, Edward J. Schnee
Akron Tax Journal
Administrative concerns occasionally override other aspects of tax policy. One example is the imposition of an annual reporting cycle which leads taxpayers to make assumptions about future events so that items can be reported on regularly scheduled returns. This can result in reporting items as income that are not actually earned by the taxpayer. For example, under the claim of right doctrine, created because of the annual reporting requirement, taxpayers must report certain receipts as income even though they are later required to return these amounts to the payor. In most cases they are permitted a deduction in the year …