Daily Tax Update - December 3, 2007

TREASURY, IRS ISSUE NOTICE ALLOWING 409A CORRECTIONS:  Today, the Treasury Department and the IRS issued a notice that gives taxpayers the ability to correct certain operational failures to comply with section 409A of the Internal Revenue Code, which addresses nonqualified deferred compensation.

• According to Treasury, “Notice 2007-100 provides relief for certain operational failures that are corrected in the same year. The notice also provides transition relief through 2010 for operational failures up to a certain amount that are not corrected in the same taxable year by limiting the amount of income inclusion and additional taxes. In addition, the notice describes and requests comments on a potential expanded program that would limit the income inclusion and additional taxes under section 409A for certain operation failures involving larger amounts.”
• For additional information, contact – Anne E. Moran – amoran@steptoe.com, Ellen Kohn – ekohn@steptoe.com or Don Wellington – dwellington@steptoe.com
• The notice can be accessed via: http://www.ustreas.gov/press/releases/reports/not2007100_publication_.pdf

INTERNAL REVENUE SERVICE - CIRCULAR 230 DISCLOSURE:
As provided for in Treasury regulations, advice (if any) relating to federal taxes that is contained in this communication (including attachments) is not intended or written to be used, and cannot be used, for the purpose of (1) avoiding penalties under the Internal Revenue Code or (2) promoting, marketing or recommending to another party any plan or arrangement addressed herein.

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