According to Accounting Today, highly paid college sports coaches (and some hospital executives) are are targets of a 21 percent excise tax by the IRS if these nonprofit employees receive $1 million or more in salary.
- What is the big loophole in the law?
- Who pays the tax? Employee or nonprofit organization?
- What is the “limited hours exception” in the law?
- How does the excise-tax provision align some of the tax rules for nonprofits with that for public corporations?
Davison, L. and McQuillan, S. (2021). Colleges paying top dollar for coaches will pay extra to IRS. Accounting Today, Jan. 12 (Retrievable online at Colleges paying top dollar for coaches will pay extra to IRS | Accounting Today)