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Updated Nonqualified Deferred Compensation Plan Audit Guide

In June the Internal Revenue Service released an updated Nonqualified Deferred Compensation Audit Technique Guide. This updated Guide replaces the initial Guide published in 2015. While it is too early to say whether the release of the updated guidance signals increased audit activity by the Service in the nonqualified plan space, plan sponsors of nonqualified […]

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COVID-19-Related Cancellations of NQDC Elections

As a general matter, deferral elections under non-qualified deferred compensation plans (“NQDCs”) cannot be cancelled unless a NQDC plan participant incurs an “unforeseeable emergency” or “disability” as each such term is defined in Section 409A of the Internal Revenue Code. Internal Revenue Service Notice 2020-50 (the “Notice”) adds a third reason to permit the cancellation […]

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RJ
Former Associate

Reminder that Nonqualified Deferred Compensation Deferral Elections for 2018 Must be Made on or Before December 31, 2017

As we approach the end of 2017, we want to remind employers and employees to take action before year end if they desire to defer compensation that will be earned during 2018.  As a general rule, Section 409A of the Internal Revenue Code requires that compensation deferrals under a nonqualified deferred compensation plan be made […]

| 1 min read | Tagged: , , ,
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IRS Audit Techniques Guide Provides Helpful Reminders for Sponsors of NQDC Arrangements

Last summer the Internal Revenue Service updated its Audit Techniques Guide (“ATG”) for nonqualified deferred compensation arrangements.  While the ATG provides little instruction on how the IRS will review nonqualified deferred compensation arrangements for compliance with Section 409A of the Code, it provides a helpful reminder of some of the other rules applicable to nonqualified […]

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Don’t Miss Short-Term Deferral Day

Section 409A, the provision of the Internal Revenue Code that regulates the time and form of payment of nonqualified deferred compensation, contains a helpful exception for “short-term deferrals.”  Specifically, Section 409A provides that a payment will not be considered nonqualified deferred compensation if the employer makes the payment on or prior to the 15th day […]

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Don’t Miss Short-Term Deferral Day

As some of you know, Section 409A of the Code contains a very helpful exception for “short-term deferrals.”  More specifically, Section 409A provides that a payment will not be considered “nonqualified deferred compensation” if the employer makes payment to the employee no later than the 15th day of the third month following the end of […]

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