The Internal Revenue Service (the “IRS”) has issued Notice 2017-75 (the “Notice”), which provides certain limited relief from the strict requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), in order to pay income taxes on deferrals attributable to services performed before 2009 that are required to be included
Section 409A
IRS Chief Counsel Memorandum Clarifies that Correction of Section 409A Failures in Year of Vesting Will Not Shield Income Inclusion Under 409A
By Joshua Miller on
Earlier this month, the Office of Chief Counsel of the Internal Revenue Service released a Memorandum clarifying the impact of a correction of a Code Section 409A operational failure before the date of vesting of nonqualified deferred compensation but during the year of vesting. In the Chief Counsel Memorandum, the IRS clarified that such a correction, under such circumstances, would not avoid income inclusion under Code Section 409A.
California Governor Signs New Law Reducing State Tax Penalty for Section 409A Violations
By Colleen Hart & Sean McGrath on
California Governor Jerry Brown has signed into law a measure that will reduce the California income tax penalty for violations of Section 409A of the Internal Revenue Code of 1986, as amended, (“Section 409A”) from 20% to 5%.
California law previously provided for a state income tax penalty equal to the federal income tax penalty…