The Internal Revenue Service has come out with rules for taxpayers that need to correct problems with nonqualified deferred compensation plans.
The rules, described in IRS Notice 2007-100, discuss the procedures taxpayers should follow to address failures to comply with Section 409A of the Internal Revenue Code.
The notice provides relief for some types of problems that are correct in the same year that they occur, officials say.
The notice also “provides transition relief through 2010 for operational failures up to a certain amount that are not corrected in the same taxable year by limiting the amount of income inclusion and additional taxes,” officials say.
The notice also describes and requests comments on a potential expanded program that would limit the income inclusion and additional taxes under Section 409A for some compliance failures involving larger amounts of money.
A copy of the notice is available