Key tax principle governing the ability to defer both the income inclusion and the taxation of nonqualified deferred compensation. Under the constructive receipt doctrine, cash-basis taxpayers owe taxes either (1) when they receive compensation or (2) before they have actually received the compensation if they have full rights to the compensation without any risk of forfeiture. Because NQDC is subject to risks from corporate insolvency and the company’s creditors in a bankruptcy, no taxes are triggered until the money is distributed. If all risks were eliminated, the IRS would determine that you had “constructively received” the compensation even if it had not yet been paid to you. See economic benefit doctrine for another set of criteria that affects income inclusion and taxes for deferred compensation.