IRC Section 409A

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With the holidays in full swing and less than one week remaining in 2022, we wanted to pass along a few compensation income tax related stocking stuffer reminders in connection with the year-end for which companies and/or individuals may want to consult about with their advisors (and in particular to see if they should take any actions before 2023). For simplicity, this blog assumes that the calendar year is the income tax year for both service providers and service recipients.Continue Reading 2022 Year-End – A Few Executive Compensation Income Tax Reminders

On Friday, December 15, 2017, Congress put forth a final version of the Tax Cuts and Jobs Act, which would signify the largest piece of tax legislation in over thirty years if signed into law. Early in the morning on December 20, the Senate voted to pass the bill, and the House later approved it on the same day. The bill is on its way to President Trump’s desk, and most expect the bill to be signed into law when he receives the package just in time for Christmas. So what does this mean from an executive compensation standpoint?
Continue Reading The President Receives an Early Christmas Present: Congress Approves Landmark Tax Bill – What Will this Mean for Executive Compensation?

As an update to our previous blog post entitled, Senate Stays Up Late to Approve Tax Bill, dated December 5, 2017, the Senate and the House appear to have come to an agreement on the final version of the tax bill that will be voted on by Congress. While nothing official has been stated or released regarding the final bill, word from the latest news outlets revolves mostly around changes to corporate and individual tax rates. One interesting thing to note is that the current agreement would allegedly repeal the corporate alternative minimum tax, which was reflected in the Senate’s final version of their bill. For a review of the differences regarding executive compensation matters between the Senate and House versions of the bills, please refer to our original blog posts entitled  Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock Options on November 14 and Startups Have Much To Be Thankful For – Senate Amendments to New Tax Bill Remove Deferred Compensation and Stock Options from Endangered Species List on November 16. 
Continue Reading Congressional Republicans Reach a Deal on Tax Bill

Early in the morning on Saturday, December 2, 2017 (it was nearly 2 AM Eastern!), the Senate voted 51-49, drawn mostly along party lines, to pass its version of the tax reform bill described in our previous blog posts Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock Options on November 14 and Startups Have Much To Be Thankful For – Senate Amendments to New Tax Bill Remove Deferred Compensation and Stock Options from Endangered Species List on November 16. Members of the Senate had only a few hours to review what was deemed to be the final version of the Senate’s bill (which, interestingly, had edits hand-written in the margins), before the vote was held. Should the Tax Cuts and Jobs Act become law, it would represent the largest reform of the Internal Revenue Code since 1986.
Continue Reading Senate Stays Up Late to Approve Tax Bill

Congress has been in a frenzy to try and get new tax legislation passed by Thanksgiving, and members of the House and Senate would presumably rather be enjoying a feast rather than drafting and analyzing additional tax provisions when Turkey day rolls around. This blog addresses the executive compensation related provisions in the proposed new tax legislation which is likely to be voted on in the very near future.
Continue Reading Thanksgiving Tax Frenzy – New Tax Bill Proposes Executive Compensation Changes That Could Derail Deferred Compensation and Stock Options

Since our October 25, 2010 blog titled, “Time Running Out to Obtain Maximum Relief for Correcting 409A Document Failures under IRS Notice 2010-6”, the IRS published Notice 2010-80 on November 30, 2010, which expands the scope of the document correction program under Notice 2010-6 and provides additional transition relief for employers to amend arrangements intended to comply with the requirements of Section 409A of the Internal Revenue Code (“409A”). As we previously reported, document corrections under Notice 2010-6 that are implemented before 2011 are treated as having been corrected on January 1, 2009, which can mean that any requirement of income inclusion under 409A as a condition of the relief would generally not apply. Therefore, with only ten days left in 2010, employers should strongly consider amending noncompliant arrangements that are eligible for correction under Notice 200-6 (as modified by Notice 2010-80) to take advantage of the maximum possible relief. Continue Reading Expanded Relief for Correcting 409A Document Failures under IRS Notice 2010-80

With less than ten weeks remaining in 2010, companies should once again consider reviewing their compensatory plans and agreements to ensure that such agreements are in documentary compliance with Internal Revenue Code section 409A (“409A”). 409A is the federal tax statute governing the taxation of nonqualified deferred compensation arrangements. While all compensation agreements should be prepared either to be exempt from or in compliance with 409A, the Internal Revenue Service has provided additional impetus for companies to re-review their compensation plans and agreements.Continue Reading Time Running Out to Obtain Maximum Relief for Correcting 409A Document Failures under IRS Notice 2010-6

Yes, sadly this is yet another blog posting dealing with that infernal Internal Revenue Code Section 409A. But, my musings here are not about the intricacies of 409A and the various tax issues it presents or even the fact that the year-end compliance deadline is now less than 125 days away! Rather my focus is on whether this pervasive tax statute also has the power to complicate securities law compliance as well.Continue Reading The Long Arm of 409A

IRS Notice 2007-86 extended the deadline for employers to bring documents into compliance with the final regulations of Section 409A of the Internal Revenue Code (the “Code”) until December 31, 2008.  With less than six months remaining in the year, we strongly encourage all employers to now take action to implement a Section 409A review process in order to allow for sufficient time to assess compliance alternatives and prepare amendments to implement any necessary changes.  Because the amendment process may generally require Board action and employee consent, advance planning for the steps that need to be taken before the end of the year becomes even more crucial.Continue Reading Reminder: Act Now! 409A Transition Relief Set to Expire December 31, 2008