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December 3, 2007
HP-707
Treasury, IRS Issue Notice Allowing 409A Corrections
Washington, DC--The Treasury Department and the Internal Revenue Service (IRS) today issued a notice that gives taxpayers the ability to correct certain operational failures to comply with section 409A of the Internal Revenue Code, which addresses nonqualified deferred compensation.
Notice 2007-100 provides relief for certain operational failures that are corrected in the same year. 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. In addition, the notice describes and requests comments on a potential expanded program that would limit the income inclusion and additional taxes under section 409A for certain operation failures involving larger amounts.
Section 409A was signed into law as part of the American Jobs Creation Act in 2004 to address concerns over reported abuses in nonqualified deferred compensation plans.
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