Pension Protection Act Blog

A few weeks ago, 92 prominent law firms sent a letter to the IRS requesting that the IRS extend the deadline to comply with the new Final 409A Regulations. The firms requested that the deadline of December 31, 2007, be extended to December 31, 2008. (hat tip to the law firm of White & Case).

Today, the IRS issued Notice 2007-78, extending the deadline to adopt plan documents which comply with the new Final 409A regulations until December 31, 2008, subject to limited requirements regarding the timely written designation of a time and form of payment. Notice 2007-78 also provides additional guidance on regarding employment agreements and cashout features of 409A and the final regulations. (hat tip to BenefitsLink.com.

Also, in Notice 2007-78, the IRS announced that a future announcement will be issued providing guidance on a voluntary compliance program which will permit taxpayers to correct certain unintentional operational 409A failures and will limit the amount of additional taxes due under 409A.

Finally, in Notice 2007-78, the IRS announced that the relief from application of Code section 409A(b) provided in Notice 2006-33, which expires on December 31, 2007, will not be extended, so that after December 31, 2007, taxpayers must comply with a reasonable, good faith interpretation of 409A(b) with respect to all assets in arrangements subject to 409A(b).

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