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Call it a Goldman handshake. The U.S. Internal Revenue Service quietly issued guidance last week that excuses executives from a 20% penalty if they sell holdings in a deferred compensation plan in order to comply with government rules on conflcts of interest. Turns out that the new Treasury secretary and outgoing Goldman Sachs (nyse: GS - news - people ) Chief Executive Henry M. Paulson Jr. was about to sell more than $470 million he owns in Goldman Sachs stock--including stock options--to comply with conflict-of-interest provisions for his new position.

A spokesperson was quoted as saying that the IRS -- an agency of the Treasury -- had been working on the guidance for some time, but hustled through its work in time so that Paulson would covered. Paulson will still have to pay regular income taxes on the deferred compensation, but he will avoid paying the 20% penalty. The writing of the new rule previously hadn't been a priority because so few people are affected under the provision, a media report added.

"When the caliber is raised to the secretary of the Treasury, it does make sense to accelerate it a bit," a spokesman was quoted as saying by The Associated Press.

President Bush nominated Paulson in May to replace Treasury Secretary John Snow, who officially stepped down from the position last Friday after more than three years on the job. Paulson won Senate approval on Thursday and is expected to be sworn in as the U.S' 74th Treasury secretary sometime this week.

On Monday it was also revealed that Paulson, whose total wealth is put around the $700 million mark, had been awarded an $18.7 million cash bonus for a half year of work at the investment bank; that's approximately $720,000 per week.

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