Ezel / IRS Rulings / 1043039
Chief Counsel Advice 1043039 Released October 29, 2010 Advice

Bonus liability timing under updated revenue procedures

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This page covers one taxpayer's ruling from 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It resolved one taxpayer's situation on its specific facts, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

Chief Counsel addressed the timing of a taxpayer’s liability for bonus compensation under Rev. Proc. 2008-52, as modified by Rev. Proc. 2009-39. When an employee must still be employed at year-end to receive the bonus and the bonus is paid within two and one-half months after the taxable year ends, the taxpayer incurs the liability in the year of payment. The advice also notes that Rev. Proc. 2009-39 allows an automatic change request for this situation.

Ruling snapshot

  • Question: In which year does a taxpayer incur liability for a bonus payable only to an employee still employed at year-end?
  • Outcome: Advice given
  • Key authorities: IRC § 461; Rev. Proc. 2008-52; Rev. Proc. 2009-39

Full text (IRS public release)

ID: CCA-915212-10 Number: 201043039
Release Date: 10/29/2010
Office: ----------------
UILC: 461.01-00

From: ----------------------
Sent: Wednesday, September 15, 2010 2:12PM
To: ---------------------
Cc: -----------------------------
Subject: RProc 2008-52 -- 133- bonus compensation

Hi,

Rev. Proc. 2008-52 has be amplified, modified, and clarified by Rev. Proc. 2009-39. Section 2.20 of Rev. Proc. 2009-39 allows the taxpayer to make an automatic change request for the situation where the employee has to be employed at the end of the year to receive the bonus and the bonus is paid with in 2 1/2 month of the taxable year end. Since the employee has to be employed at the end of year, the taxpayer would incur the liability for the bonus in the year of payment.

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