Total Articles: 17
Littler Mendelson, P.C. • July 04, 2016
The Internal Revenue Service recently issued proposed regulations under Section 457 of the Internal Revenue Code (the “Code”) that prescribe rules regarding deferred compensation plans sponsored by state and local governments and tax-exempt organizations. These regulations relate primarily to the taxes imposed (under Code Section 457(f)) on the organization at the time the individual’s right to compensation vests, without regard to actual time of payment.
FordHarrison LLP • June 18, 2014
Executive Summary: At the American Bar Association Section of Taxation 2014 May Meeting, an IRS official announced that the IRS has created a compliance initiative project (CIP) for Section 409A of the Internal Revenue Code (IRC). As part of the CIP, the IRS will review the deferred compensation plans of selected employers to evaluate their compliance with Section 409A requirements.
ManpowerGroup • October 29, 2012
Everything you ever wanted to know about Section 409A in one handy post.
Schulte Roth & Zabel LLP • January 03, 2011
Employers and employees routinely enter into arrangements guaranteeing employees separation benefits upon the employee’s termination of employment. Such agreements appear, for example, in employment agreements, severance plans, change of control agreements and separation agreements. Many of these arrangements are not covered by Section 409A of the U.S. Internal Revenue Code of 1986, as amended (“409A”), which governs nonqualified deferred compensation plans. A plan that is covered, however, must meet 409A’s strict rules, or employees under the plan may be immediately taxed on vested benefits under the plan, even if they have not yet been paid the benefits, and may have imposed on them an additional 20% tax on the benefits and premium interest taxes.
Fisher Phillips • February 03, 2010
Section 409A of the Internal Revenue Code generally provides that nonqualified deferred compensation plans must comply with certain complex rules regarding the timing of deferrals and distributions. Compliance must be in both form and operation. Failure to abide by section 409A's requirements will result in all amounts deferred under the plan for the current year and all previous years becoming immediately taxable to the employee, plus an additional 20% excise tax and interest penalty. As a result, a failure to comply with the requirements of section 409A can have severe adverse tax consequences to the executive.
Ogletree Deakins • January 19, 2010
On January 5, 2010, the Internal Revenue Service (IRS) issued Notice 2010-6 providing employers and employees with long-awaited guidance (and relief) with respect to correction of certain document failures that otherwise would subject nonqualified deferred compensation arrangements to the punitive terms of Section 409A of the Internal Revenue Code. Although the IRS previously issued guidance in December 2008 relating to voluntary correction of operational failures, the earlier guidance did not provide relief for document failures. The new Notice provides relief for certain document failures and clarifies earlier guidance dealing with operational failures by nonqualified deferred compensation arrangements and reporting and withholding guidelines under Section 409A.
Fisher Phillips • October 06, 2008
Many employers are now beginning their compensation planning for 2009. But this year, unlike others, brings a new holiday treat, namely required full compliance with Section 409A of the Internal Revenue Code which places significant limitations and conditions on so-called "deferred compensation" plans and agreements.
Jones Walker • August 01, 2008
Non-qualified deferred compensation arrangements are now subject to a tough new tax
regime under Internal Revenue Code Section 409A. Section 409A became effective on
January 1, 2005, but, because of the complexity of the issues involved in applying the
law, the IRS did not issue final regulations until 2007. As a result, employers have been
given until December 31, 2008, to bring plans and agreements into full documentary
compliance (i.e., to amend written plans and put unwritten plans into writing).
Ogletree Deakins • March 04, 2008
In Revenue Ruling 2008-13 (Feb. 21, 2008), the Internal Revenue Service (IRS) added an additional layer of complexity to drafting compensation arrangements for senior executives - an area of the law that already has been subjected to unprecedented changes as the result of Internal Revenue Code (IRC) Section 409A. The ruling adopts a new interpretation of IRC Section 162(m), which Congress enacted in 1993 to limit the amount publicly-traded companies and their affiliates can deduct for compensation paid to their highest-ranking executives. Rev. Rul. 2008-13 expands the scope of Section 162(m) so that an executive's performance-based compensation under a performance plan that satisfies all the criteria of Section 162(m) will be non-deductible solely because the executive also is covered by a severance provision that takes his or her targeted performance bonus into account in calculating severance pay.
Ogletree Deakins • September 26, 2007
With open enrollment only weeks away, your new online system is still being tested. It's not going well. The latest merger, the largest yet, is closing at year-end, meaning thousands of new and wary employees must assimilate into your benefit programs. Your daughter wants to be who for Halloween? And isn't it your turn to host your spouse's family (all of them) for Thanksgiving?
Ogletree Deakins • September 14, 2007
On Monday, September 10, 2007, the Treasury Department and the IRS issued Notice 2007-78, which provides limited transition relief and additional guidance on the application of Internal Revenue Code Section 409A to nonqualified deferred compensation plans. Notice 2007-78 extends the deadline for plan document compliance under 409A from December 31, 2007, to December 31, 2008. The notice allows a plan to be amended retroactively to January 1, 2008, if the plan contains all of the provisions required by the 409A final regulations and reflects the operation of the plan on or after January 1, 2008.
Fisher Phillips • June 28, 2007
An issue unique to the private school industry is for the school to pay ten-month teachers over a twelve-month period. This allows both the school and the teacher to budget throughout the year and allows the school to have money from which to make insurance payment deductions during the summer break.
Ogletree Deakins • June 15, 2007
On April 10, 2007, the Internal Revenue Service (IRS) and the Department of the Treasury issued final regulations under Internal Revenue Code Section 409A. Section 409A was added to the Code by the American Jobs Creation Act of 2004 and is generally effective for compensation deferred on or after January 1, 2005, under certain nonqualified deferred compensation plans and arrangements ("nonqualified plans").
Nexsen Pruet • June 07, 2007
On April 10, 2007, the IRS issued its final regulations interpreting the nonqualified deferred compensation requirements.
Fisher Phillips • May 29, 2007
On April 17, 2007, the Treasury Department released final regulations interpreting the nonqualified deferred compensation requirements of Section 409A of the Internal Revenue Code. Nonqualified deferred compensation that fails to satisfy the requirements of Section 409A is subject to punitive tax treatment and penalties.
Fisher Phillips • May 16, 2007
On April 17, 2007, the Treasury Department released final
regulations interpreting the nonqualified deferred compensation
requirements of Section 409A of the Internal Revenue Code.
Nonqualified deferred compensation that fails to satisfy the requirements
of Section 409A is subject to punitive tax treatment and penalties.
Ogletree Deakins • April 16, 2007
The IRS has issued the final regs under Section 409A, effecting deferred compensation.