Legal Memorandum: Lump-sum Payment as Deferred Compensation

Issue: Under federal law, if an employer amends an employee life insurance benefit program and no longer requires employees to contribute to the premiums and offers a lump-sum payment as reimbursement for previous premiums paid, is there an argument that the lump sum payment is a form of deferred compensation?

Area of Law: Insurance Law, Tax Law
Keywords: Lump-sum payment; Deferred compensation; Reimbursement for previous premiums paid
Jurisdiction: Federal
Cited Cases: None
Cited Statutes: I.R.C. §§ 3121(v), 3306(r)
Date: 02/01/2001

The IRS may construe the lump-sum payment as payment of deferred compensation under I.R.C. §§ 3121(v) and 3306(r). 


Subscribe to Litigation Pathfinder

To get the full-text of this Legal Memorandum ... and more!

(Month-to-month and annual subscriptions available)