Notice 2010-6 Disclosure of "amount involved"

[Guest usafa89]

Notice 2010-6 requires in the "tell on yourself" disclosures, to report the "amount involved in each document failure", the amount reported as income, and the percentage of the "amount involved" that has to be reported.

Do you think "amount involved" means "amount deferred?" I searched the Proposed Regs under 409A-4 for the term "amount involved" and it doesn't exist. Nor does 2010-6 define "amount involved." This whole disclosure thing is so ridicuous - when there is no amount required to be included in income. Is the "amount involved" per participant? or in the aggregate?

Thanks for any thoughts.

CW

[Guest sheTexasHammer]

I have also been wondering what the "amount involved" means? So far, I have found no guidance. Pending further clarification, my reasonable interpretation would be to report the "amount involved" as it is described under the plan document (i.e., basically describing the benefit formula rather than giving an exact number). It would be particularly burdensome to calculate the numerical amount of the benefit for a plan in which there were 200 affected participants!

[XTitan]

I would interpret "amount involved" as the amount to report as income if there were a full 409A violation without relief granted under Notice 2010-06, as outlined in the proposed regs for income inclusion, and is based on the specific requirements outlined in the section that affords the relief.

The Notice 2010-06 reporting amounts are the "amount involved", the amount includible in income, and the percentage of the "amount involved" to include. For example, if as part of the correction procedure, the amount to include is 50% of amounts deferred, then the "amount involved" would seem to be 100% of the amounts deferred. Paying 20% of 50% is still better than paying 20% of 100% + premium interest taxes.

[Guest JM123]

I thought I would refresh this thread to see if anyone has any different thoughts now that it's the end of Nov. and corrections are being made.

[Guest MJ1]

I would interpret "amount involved" as the amount to report as income if there were a full 409A violation without relief granted under Notice 2010-06, as outlined in the proposed regs for income inclusion, and is based on the specific requirements outlined in the section that affords the relief.

The Notice 2010-06 reporting amounts are the "amount involved", the amount includible in income, and the percentage of the "amount involved" to include. For example, if as part of the correction procedure, the amount to include is 50% of amounts deferred, then the "amount involved" would seem to be 100% of the amounts deferred. Paying 20% of 50% is still better than paying 20% of 100% + premium interest taxes.

So must this be done separately for each affected participant, or is it permissible to report the total amount for all participants with substantially similar document failures?