IRS Guidance Spares Paulson From $96M Penalty

The Internal Revenue Service reportedly accelerated guidance on deferred compensation so that freshly confirmed Treasury Secretary Henry Paulson could avoid a 20% penalty for cashing out his Goldman Sachs stock holdings early.

The Internal Revenue Service reportedly accelerated guidance on deferred compensation so that freshly confirmed Treasury Secretary Henry Paulson could avoid a 20% penalty for cashing out his Goldman Sachs stock holdings early. The Associated Press reports that the IRS clarified that when divestiture occurs early because the account holder may experience conflicts of interest when entering public service, such a person is exempt from the penalty. Congress imposed the levy in 2004 to deter executives from taking the money and running early. Thanks to the guidance, which became top priority for the IRS, Paulson stands to save a pretty penny – to the tune of around $96 million – though he will still have to pay regular income taxes.