IRS Issues Section 409A Document Correction Program

January 27, 2010
The IRS recently released Notice 2010-6 that allows employers to correct certain documentary failures with respect to non-qualified deferred compensation plans. Under Code Section 409A of the Internal Revenue Code, such plans were required to be in documentary compliance by January 1, 2009. The Notice provides plan sponsors with the ability to correct documentary defects in their plans as well as a limited amendment period that allows plan sponsors to shield employees from the immediate taxation and penalties that would otherwise be imposed. This update examines the Notice, which serves as a reminder to sponsors of non-qualified deferred compensation plans to review their existing plans to determine whether additional amendments are warranted in order to ensure compliance with Section 409A.