A hot new rumor in the world of executive compensation professionals is that the IRS will be announcing a "one last chance to fix your documents for 409A" program in the very near future (okay, so we tend to get excited by little things). IRS Senior Counsel Stephen Tackney made the announcement at an ABA meeting. Apparently the document correction program would function like the operation failure correction program in IRS Notice 2008-113. That is, plan sponsors would have to self-correct the errors and bear any costs associated with the correction. However, Mr. Tackney also suggested the plan sponsors must attach information about their corrections to their tax returns for the year and affected participants must attach the same information to their personal returns.
This program should be good news for many plan sponsors who, despite all of our efforts, did not quite get their documents revised to comply with the final regulations under Section 409A last year. For others, it will simply prolong the nightmare we thought had ended on December 31, 2008.
(At the same conference, Anne Krauskopf, senior special counsel in the SEC Division of Corporation Finance, said the staff is still planning to make the new Executive Compensation disclosure rules (including risk assessment requirements) effective for the upcoming proxy season.) Michael S. Melbinger
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