The March 2 print edition of the Wall Street Journal reports that the IRS has abandoned its effort to disallow $161 million of deductions taken by the New York Stock Exchange for compensation paid to former CEO Richard Grasso.
In 2003, Richard Grasso resigned under controversy when his massive pay package of the then not-for-profit NYSE was made public. A number of legal actions ensued including an IRS examination of the stock exchange. Under audit, the IRS disallowed approximately $161 million of deductions taken for compensation allocated to the former executive between 2001 and 2003.
In 2009, the NYSE challenged the government’s determination and submitted its protest to the IRS Office of Appeals. The Wall Street Journal reports that after two years in the appeals process, in November of 2011 the IRS concluded that there was no tax deficiency for the challenged years and ultimately resolved the matter in favor of the NYSE.