Legal Alert: Making Tax Code Section 409A Corrections Before Time Runs Out

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Problem: In less than six months, your company?s executives may become liable for income tax, plus a 20% additional tax, as well as penalties and interest, on income they have earned, even if payment is not due until a later year, or is conditioned on an event, such as a termination without cause that is uncertain to occur. This applies to both public and private companies. December 31, 2008 is the deadline to bring your company?s non-qualified deferred compensation plans and arrangements, including employment and separation agreements into full compliance with §409A of the Internal Revenue Code.

Issue: What changes must you make to correct your company?s compensation and benefit arrangements to comply with §409A?

See full alert for Solution.

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