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Nonprofit Executive Pay Glitch Needs Fix: Joint Tax Counsel

Jan. 25, 2018, 11:54 PM

The new tax law should be corrected to make clear that public universities—such as those that employ highly compensated sports coaches—are subject to a new excise tax on executive compensation, a Joint Committee on Taxation official said.

The new law requires that specified tax-exempt organizations—for tax years beginning after Dec. 31, 2017—are required under new tax code Section 4960 to pay an annual excise tax on compensation exceeding $1 million paid to certain employees.

There is some thought outside of the government that public tax-exempts—state universities, colleges, hospitals—"could get out of it because of this glitch in the way the...

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