IRS Extends Deferred-Comp Plan Deadline

After repeated pleas from tax practitioners, lawyers and others, the Treasury Department and the Internal Revenue Service announced that they would extend the final deadline for compliance with new rules on nonqualified deferred-compensation plans for a year, until Dec. 31, 2008.The regulations, which provide guidance under Section 409A regarding the requirements for deferral elections and payment timing in deferred-comp plans, were in response to legislation enacted in 2004. Section 409A has been effective since Jan. 1, 2005, but the IRS did not release the final regulations until April of this year, with an original deadline of Dec. 31, 2007, which many felt was far too early, given the complexity of the plans and the amendments that companies may have to make to them.Over the summer, a number of practitioner groups, including a group of 92 separate law firms, contacted the Treasury and the IRS to press the case for more time.The IRS noted that it plans to follow up Notice 2007-86, which extends the deadline, with guidance regarding a correction program as soon as possible.