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December 31 Deadline for Section 409A Amendments

As noted repeatedly in the pages of this publication, the IRS has established a deadline of December 31, 2008, for coming into full documentary compliance with the requirements of Section 409A of the Internal Revenue Code. By this date, all plans and arrangements providing “deferred compensation” in return for the provision of services must be amended to comply with the various constraints imposed by Section 409A.

Alternatively, deferred compensation arrangements may be revised to fall within one or more of the exemptions to this provision. In either event, the failure to adopt appropriate amendments by the end of this calendar year could expose executives and others who are entitled to deferred compensation to extensive penalties under the Tax Code. Spencer Fane’s Employee Benefits Group stands ready to assist employers with this task.