IRS Extends Section 409A Documentation Deadline – Action Still Required By December 31, 2007

On September 10, the IRS released Notice 2007-78 extending the deadline for documentary compliance with Section 409A of the Internal Revenue Code from December 31, 2007 to December 31, 2008. Section 409A imposes significant rules related to deferred pay arrangements that became effective January 1, 2005. Final regulations relating to these rules were released earlier this year and provide that pay arrangements are required to be in "good faith compliance" with the rules through the effective date of the regulations, January 1, 2008. Additionally, under the rules, certain substantive changes in the form and timing of distributions under a deferred pay arrangement are permitted to be made through December 31, 2007.