IRC § 409A Deferred Compensation Rules and Approaching Deadlines

Richard L. Alpern, (Consultant, Frederic W. Cook & Co., Inc.) has recently published his article entitled Ten Items Estate Planners and Tax Advisers Need to Know About Code §409A Deferred Compensation Rules, Prob. & Prop., Nov./Dec. 2007, at 32.

Here is the introduction to his article:

Section 409A of the Internal Revenue Code (“Code”) became effective on January 1, 2005. Because of transition relief and postponements of the deadline for adopting amendments, many companies, executives, and their advisers have not paid full attention to its effects and requirements. The final regulations issued in April 2007 provide that the transition relief ends on December 31, 2007. The amendment deadline had been extended until December 31, 2008, under IRS guidance issued on September, 10, 2007, provided that a time and form of payment that comply with Code §409A are specified in writing before January 1, 2008.

With the amendment and full compliance deadlines almost here, it is very important to have a basic understanding of the lengthy and complex Code §409A rules and what needs to be done by the end of 2007. This article discusses ten key items that estate planners and tax advisers should know about the Code § 409A rules.