Jonathan Grissom, April Fortner and Kerry Halpern examine the expanded Code §4960 excise tax rules for tax-exempt organizations. They explain that the new covered employee definition, generally effective for taxable years beginning after December 31, 2025, significantly broadens the group of employees organizations must evaluate for potential excise tax exposure. The authors recommend reviewing compensation, deferred compensation and severance arrangements, along with payroll, tax reporting and compliance processes, while organizations await proposed Treasury and IRS regulations.