"The employer must be committed to pay no less than the approved bonus pool amount, with no ability to reduce or change the aggregate amounts payable. Any further approvals or modifications to individual award amounts that result in a reduction of the approved bonus pool amount cause the entire bonus pool amount to be considered deductible in the year paid. The new insight from the IRS is their position that individual allocations from the approved bonus pool amount may be made after the close of the tax year without running afoul of the 'all events' tests, but any discretion or application of individual performance standards that results in a reduction of the approved bonus pool amount after the close of the tax year will cause the entire bonus pool amount to fail the 'all events' test for the prior tax year."  MORE >>