Small Business Reading Room

Wednesday, November 24, 2004

New Revenue Rulings Regarding Employment Contracts

The IRS recently published two new revenue rulings regarding payroll taxation of employment contract payments. The two issues addressed by the rulings are:
  • Payments for signing bonuses, as frequently found in professional sports - Revenue Ruling

  • Payments in lieu of completion of a contract. These are cancellation payments - Revenue Ruling

In very general terms, the IRS is consistent in claiming that all payments under an employment contract are subject to FICA, FUTA and income tax.

Happy Holidays

We in the United States will be celebrating our thanksgiving holiday tomorrow (Nov. 23) and Friday (Nov. 24). The Delaware Division of Corporations and therefore, Delaware Intercorp, Inc., will be closed.

Thanksgiving is a tradition that was formalized in the 1860's when Abraham Lincoln declared the celebration a national holiday. We are celebrating the early colonists survival of their first winters in New England.

We certainly hope this will not cause any inconvenience for our clients. From here to the end of the year, processing times at the Division of Corporations will increase. Please be aware of the increased processing times when deciding if you will require expedited service in the next month.

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Delaware Intercorp, Inc.
113 Barksdale Professional center
Newark, DE 19711-3258

"For all the best reasons to incorporate,the best place
is Delaware and the best incorporator is
Delaware Intercorp!"

Call Monday - Friday 09:00 (am) - 17:00 (pm) Eastern Time (GMT-05:00)

Toll Free - USA only - 888.324.1817
International: (1) 302.266.9367
FAX: 302.266.9940