Excerpt: Companies should consider whether the IRS' new position on Section 162(m) also impacts bonuses intended to qualify as 'performance bonuses' for purposes of the special deferral rules of Section 409A (which permit deferral elections to be made up to six months before the end of the performance period). Additionally, as companies amend their compensation arrangements for Section 409A, they will need to consider whether such amendments will result in the employment contracts no longer qualifying for the Section 162(m) transition relief described above on the basis the employment contracts have been renewed or extended.

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