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Deferred Problems

Corporations have been holding their breath for almost two years waiting for the IRS to produce final regulations interpreting Section 409A. This code affects the tax treatment of a wide range of deferred compensation arrangements for any person who provides services to a corporation, including employees, directors, independent contractors and partners.

Unfortunately, the IRS's announcement Oct. 4 that it was extending the compliance deadline from Dec. 31, 2006, to the end of 2007 gives corporations little time to catch their breath. With final regulations also not expected until the end of this year, they will still have onlyabout a year to bring their plans into written compliance.


Julius Melnitzer

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