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ARTICLE · 15 JANUARY 2008

IRS Proposes Correction Program For Certain Unintentional, Operational Violations Under Deferred Compensation Plans Subject To Section 409A

Fenwick
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On Dec. 3 the IRS released Notice 2007-100, providing temporary correction methods for certain operational failures of non-qualified deferred compensation plans that would otherwise invoke the penalty taxes under Section 409A (Section 409A) of the Internal Revenue Code of 1986, as amended (California, which has enacted a parallel penalty tax may, in light of this notice, announce their own correction program).

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Scott Spector
Scott Spector
John Ludlum
John Ludlum
Tahir Naim
Tahir Naim
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Overview Of Latest Developments

On Dec. 3 the IRS released Notice 2007-100, providing temporary correction methods for certain operational failures of non-qualified deferred compensation plans that would otherwise invoke the penalty taxes under Section 409A ("Section 409A") of the Internal Revenue Code of 1986, as amended (California, which has enacted a parallel penalty tax may, in light of this notice, announce their own correction program).

In particular, it will be possible to correct some, but not all, operational failures of nonqualified deferred compensation arrangements if the correction is made in the same tax year as the failure. Correctable violations are those that are either:

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