7.1.8.a: Section 409A: Interim Guidance and Proposed Regulations from the Treasury.

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Abstract

This installment of the Mintz Levin Deferred Compensation Advisory Series focuses on what equity compensation arrangements are exempt from the deferred compensation rules of § 409A of the Internal Revenue Code of 1986 (the "Code"). As more fully described in our prior client advisories on deferred compensation, Code §409A was enacted under the American Jobs Creation Act of 2004, and it changed several tax rules governing deferred compensation. The enactment of Code §409A has been followed by the issuance of interpretative guidance from the IRS and Treasury in the form of Notice 2005-1, issued in December 2004, and a set of proposed Treasury regulations (the "Proposed Rule"), issued in September 2005.