ITB 11-66: Current year deduction for bonuses paid in following year

Insurance Tax Bulletin
On November 9, the IRS released Rev. Rul. 2011-29, taxpayer-favorable guidance relating to a taxpayer's ability to take into account under section 461 accrued bonuses that are payable to a bonus pool rather than to specific individuals. In the ruling, the IRS concluded that an employer can establish the "fact of the liability" under section 461 for bonuses payable to a group of employees even though the employer does not know the identity of any particular bonus recipient or the amount payable to that recipient until after the end of the tax year.

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