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.

Notable improvements to the existing 409A correction programs as provided by Notice 2010-80 are as follows: