This free Officer's Undertaking template can be used by a U.S. business corporation to obtain a promise from an officer to repay any unreasonable compensation.
- The determination of whether or not compensation is unreasonable is made by the Internal Revenue Service when calculating the corporation's federal income tax liability.
- If the compensation is deemed to be unreasonable and the corporation's tax deduction disallowed, the corporation may recoup the amount paid to the officer.
- You can download the Officer's Undertaking form as a MS Word template, or simply copy and paste the text below to create your own version.
OFFICER'S UNDERTAKING TO REPAY COMPENSATION DECLARED UNREASONABLE
The undersigned, an officer of _____________________________ [NAME OF CORPORATION] (the "Corporation"), hereby undertakes, in the event that any part of the compensation paid to the undersigned by the Corporation be disallowed as unreasonable compensation and/or an unreasonable deduction in the calculation of the federal income tax liability of the Corporation, by the Internal Revenue Service of the Department of the Treasury of the United States, to repay to the Corporation the full amount of all such compensation deemed unreasonable within _____ days after a final disallowance of such deduction by the Internal Revenue Service and the conclusion of any appeals made from such a determination.
DATED at ____________________ this _____ day of ______________, 20____.
Signature of Officer
Last Updated: 07-March-2018