Executive Compensation Round-Up: 2008 Planning Tips

IRS Releases Limited Code Section 409A Compliance Program

The IRS has established a limited voluntary correction program for inadvertent operational failures of a nonqualified deferred compensation plan to satisfy Code Section 409A. Under the program, certain unintentional failures may be corrected within the same taxable year, with no income inclusion or penalties. In addition, for 2008 and 2009, the program provides relief for violations involving amounts within the Code Section 402(g) limit ($15,500 for 2008) that are not corrected during the taxable year of the violation. In such cases, only the amount of the violation is taxed and subject to penalty (not all amounts deferred under the plan).