IRS Releases Notice 2007-86: Additional 409A Transition Relief Through 2008

On October 22nd, the IRS announced in Notice 2007-86 that it is further extending the transition relief under Section 409A of the Internal Revenue Code for nonqualified deferred compensation arrangements (generally referred to in this article as "plans"). The extension generally permits plans to be operated through December 31, 2008 in good faith compliance with Section 409A, as long as the plans are amended on or before December 31, 2008 to comply with Section 409A. This extension is a more complete extension than the IRS previously granted in Notice 2007-78, which required some plans to be amended by the end of 2007. The new notice rescinds this requirement and instead provides until December 31, 2008 for all plans to be amended.