Tax Group News

IRS Reaffirms No Extension of Nonqualifed Plan Amendment Deadline

 February 18, 2008     Gilbert Van Loon     Link To This Post

When the IRS extended the deadline late last year for bringing nonqualified deferred compensation arrangments into compliance with Section 409A, they emphasized that there would be no further extensions and that December 31, 2008 would be the absoute deadline. More recently, the principal author of the IRS regulations in this area, speaking to a practitioner group and a recent seminar, has reiterated that theme, incidating that the IRS was not working on any guidance projects currently that would affect the amendment process. His admonition to sponsors and practitioners was to get to work to make their documents compliant. He also said that there is little hope of any type of IRS program to obtain approval of nonqualified deferred compensation documents in the near future and that the IRS had limited resources to develop any type of correction program. The clear message is that plan sponsors and practitioners need to get it right the first time or risk the draconian penalties that come with a violation of Section 409A. For prior coverage of Section 409A, see newsletter 01 and newsletter 02.