A Primer on the Tax Law Issues Years ago, “golden parachute” payments were fully tax deductible by the employer if they were “ordinary and necessary” business expenses under Internal Revenue Code § 162. However, due to controversy over large executive pay packages, the Tax Reform Act of 1984 added § 280G to the Internal Revenue Code. This article discusses planning and tax deductibility issues under the current law. Golden parachute arrangements typically provide for large cash payments to a corporation’s key executives if those individuals are terminated due to a change in the control of the company. Years ago, these…