Why should service providers and service recipients be concerned with Internal Revenue Code Section 409A at this time?
Because all deferred compensation plans and arrangements must be amended by December 31, 2008. Appendix FAQ-2 describes the types of deferred compensation plans and arrangements covered by Section 409A. A failure to timely amend will result in a violation of Section 409A and the imposition of civil penalties upon the service provider and service recipients involved. See Appendix FAQ-3 for a detailed description of the penalties involved. Time is running out on employers who have yet to ascertain whether the written terms of their plans and agreements providing for deferred compensation are in compliance with the requirements of Section 409A. A lengthy (396 pages to be exact) and complex set of 409A final regulations, issued in April 2007, will be enforced as of January 1, 2009. Q-2: Is there any possibility that the IRS will extend the December 31, 2008 compliance deadline? Not really. After granting several deadline extensions, there is no realistic prospect that the IRS will grant an
Related Questions
- My organization does not have federal exemption (or is exempt under a different Internal Revenue Code section). How do I obtain tax-exempt status for California?
- Why should service providers and service recipients be concerned with Internal Revenue Code Section 409A at this time?
- Is the Section 179 expense limit based on the Internal Revenue Code as of Jan. 1, 2007 or the most recent version?
