The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu The leading online blog in the fields of corporate governance and financial regulation. Mon, 20 Apr 2026 13:53:40 +0000 en-US hourly 1 https://wordpress.org/?v=6.5.8 https://corpgov.law.harvard.edu/wp-content/uploads/2024/02/cropped-photography-4-e1706898544564-1-32x32.png IRS Guidance on Section 162(m) – The Harvard Law School Forum on Corporate Governance https://corpgov.law.harvard.edu 32 32 IRS Guidance on Section 162(m) https://corpgov.law.harvard.edu/2018/09/08/irs-guidance-on-section-162m/?utm_source=rss&utm_medium=rss&utm_campaign=irs-guidance-on-section-162m https://corpgov.law.harvard.edu/2018/09/08/irs-guidance-on-section-162m/#comments Sat, 08 Sep 2018 13:47:17 +0000 https://corpgov.law.harvard.edu/?p=110559?d=20230208100447EST Posted by Arthur Kohn, Michael Albano, and Julia Rozenbilt, Cleary Gottlieb Steen & Hamilton LLP, on Saturday, September 8, 2018
Editor's Note:

Arthur H. Kohn and Michael Albano are partners and Julia Rozenbilt is a practice development lawyer at Cleary Gottlieb Steen & Hamilton LLP. This post is based on a Cleary Gottlieb memorandum by Mr. Kohn, Mr. Albano, Ms. Rozenbilt, Mary Alcock, and Caroline Hayday. Related research from the Program on Corporate Governance includes The “Hidden” Tax Cost of Executive Compensation (discussed on the Forum here) by Kobi Kastiel and Noam Noked.

On August 21, 2018, the Internal Revenue Service (“IRS”) issued Notice 2018-68 (the “Notice”), which provides initial guidance on the application of Section 162(m) of the Internal Revenue Code, as amended by the 2017 Tax Cuts and Jobs Act (“TCJA”). [1] The guidance is limited to the definition of the term “covered employees” and the application of the transition rule accompanying the TCJA amendments. Certain aspects of the Notice will be of practical significance for many companies in connection with the potential deductibility of their executive compensation, even though the amount of the lost deductions may not be material to each company from a financial perspective. The Notice states that the IRS plans to issue further guidance in the form of proposed regulations and solicits comment on certain aspects of Section 162(m) as amended that are not addressed by the Notice.

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