Question
Accounting For Taxation
Deferred Compensation:
Deferred compensation is an arrangement in which a portion of
an employee’s income is paid out at a later date after which the
income was earned. Examples of deferred compensation include
pensions, retirement plans, and employee stock options. As the tax
manager of a large corporation, you must understand and communicate
the taxability of deferred compensation in order to be prepared to
fully educate human resources on the implications to the company’s
employees.
Research the topic and write a six to eight (6-8) page paper
in which you:
Research the U.S. Tax Code to determine how your 401(k) deferred
compensation is taxed. Determine whether the treatment is
reasonable. Provide support for your conclusions.
Assume that you have the authority to tax the current 401(k)
contribution on the condition that you are not taxed upon
distribution. Discuss the pros and cons of using this approach on
both you and the federal government.
Propose an alternative to the taxation for the 401(k)
deferred compensation that would be fair to all taxpayers and
support the financial needs of the federal government. Indicate
substantive ways in which your recommendation would achieve
fairness to taxpayers and the United States Treasury.
Research recent IRS audit activities related to deferred
compensation to determine the most frequent types of deferred
compensation that would most likely trigger an IRS audit. Propose a
strategy that you would use to defend a client facing an IRS
challenge on deferred compensation.
Use at least three (3) quality references. Note: Wikipedia
and similar websites do not qualify as academic resources. You have
access to Strayer University’s Online Library at
https://research.strayer.edu and iCampus University Library
Research page at https://icampus.strayer.edu/library/research.
Your assignment must follow these formatting requirements:
Be typed, double spaced, using Times New Roman font (size 12),
with one-inch margins on all sides; citations and references must
follow APA or school-specific format. Check with your professor for
any additional instructions.
Include a cover page containing the title of the assignment,
the student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in the
required assignment page length.
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