The New York State Bar Association Tax Section has released a report on Remedying Documentary Noncompliance by Section 409A Plans in Response to Notice 2008-113 (No. 1180):
establishing a voluntary compliance program that would provide relief to taxpayers that have
established a nonqualified deferred compensation plan that fails by its terms to comply fully with
Section 409A … to bring the plan into compliance. This report responds to
Notice 2008-113’s request for comments. …
[W]e propose below a three-pronged program. The first would set out specific, narrowly
targeted types of violations which may be viewed as presenting a low probability of abuse and
which we therefore view as appropriate for inclusion in a list of correctable violations. The
second would relate to those circumstances in which errors are quickly discovered and corrected.
The third involves the establishment of a policy of prospective enforcement and liberal
transitional relief to allow taxpayers to adapt to new authorities interpreting Section 409A or
changes in enforcement approach. Our proposals are intended to facilitate the establishment of a
program consistent with Treasury's and the IRS's two identified general principles, while also
addressing over the course of our discussion below the seven issues specifically identified by
Treasury and the IRS for comment.
