Notice 2007-86 from the U.S. Treasury Department and the Internal Revenue Service (IRS) set the new compliance deadline for the 409A mandates as December 31, 2008 rather than the end of this year.
The announcement also included word that the federal regulators expect to issue guidance on a 409(A) correction program “as soon as possible.”
Generally, the regulations provide guidance regarding the requirements for deferral elections and payment timing under section 409A.
The government officials acknowledged in Monday’s announcement that they had heard the compliance delay pleas.
“Commentators stated that although the Notice 2007-78 transition relief was helpful, the transition relief in that notice did not adequately address the need for additional time for service recipients and service providers to analyze all of their plans and make informed and reasoned decisions regarding the changes that would be necessary to bring existing arrangements into compliance with the final regulations,” regulators admitted. “This notice addresses these concerns by generally extending the transition relief currently scheduled to expire on December 31, 2007 through December 31, 2008.
The final 409A regulations issued in April, which provided guidance regarding the requirements for deferral elections and payment timing under section 409A, required compliance by December 31, 2007 (See Final Deferred Compensation Regulations Issued).
In September, Notice 2007-78 extended the document compliance deadline for one year and provided additional limited transition relief, but did not extend the January 1, 2008 effective date of the final regulations (See IRS Extends Deadline for 409A Compliance).
The latest IRS announcement is here.