Can document correction restore 409A exception?

[Guest 409 eh?]

We have an agreement that was originally intended to comply with the short-term deferral exception. For various reasons, it does not satisfy the STD exception (or any other) and is thus subject to 409A. We are contemplating a document correction under 2010-6.

The question is - can we correct under Notice 2010-6 and restore the agreement to compliance with the 409A exception? Or, once we admit that we are subject to 409A and correct under the notice, will the agreement always be subject to 409A?

Any thoughts would be much appreciated.

[Guest carltberry]

Funny user name, btw.

Notice 2010-6 applies to "deferred compensation plans" within the meaning of Code Section 409A, allowing taxpayers to correct certain documentary non-compliance with the requirements of Code Section 409A. It sounds like you are dealing with a deferred compensation plan (within the meaning of Code Section 409A), because the arrangement doesn't qualify for the short term deferral exception (or any other exceptions), even though it could have been designed to meet the short term deferral exception's requirements (presumably without frustrating the parties' intent). Although Notice 2010-6 may provide avenues to correct documentary failures, I do not read Notice 2010-6 as providing any means to "redo' a 409A-subject arrangement to make it fall within the short term deferral exception (such a change would not be necessary to comply with the requirements of Code Section 409A). Stated differently, failure to qualify for the short term deferral exception does not constitute non-compliance with the requirements of Code Section 409A (i.e. there is nothing to "correct" under Code Section 409A).

Also, don't forget the final regulations' "substitution" rules, whereby a substituted arrangement that would qualify for an exception to the definition of deferred compensation by itself would nonetheless be deferred compensation if substituted for a deferred compensation arrangement.

Good luck!

Disclaimer: This communication is not legal or tax advice.

[Guest 409 eh?]

Thanks for your input! I completely agree that a failure to satisfy a 409A exception does not itself constitute a 409A failure. However, we have one of those tricky release provisions that IRS guidance is saying is a document failure under 409A, and since we don't qualify for the exception... I guess that was an important fact to leave out!

At this point, I'm thinking that we cannot "re-do" either and now, regardless of our correction, we have a 409A document.

[Guest smiler]

Learn to love yourself

We must learn to love herself. In our most painful and helpless, SWTOR power leveling when the most helpless; in the black hole we have to walk through a rainy night alone, no stars and no moon, when; in our life, the suffering of supporting independence, no one can share the time for us; we to learn to give yourself a flower, give yourself painting a coastline, give yourself a beautiful smile, and then With a good feeling and good luck wishes to live.

Some people might say that this is a self-deception, but if this short-term real deception to obtain long-term well-being, self-deception about what is wrong with that? Difficulty is a required course, the more credits accumulated, the more abundant harvest! Beyond the immediate difficulties, there are new difficulties to challenge waiting for us! Constantly challenged, and constantly go beyond the process, love their all, in order to better take a good with a pretty hard life!

Learn to love yourself, Wow power leveling which is derived from respect for life and the treasure itself, can make our lives more full more healthy, but also allows more freedom of our soul is more robust, allowing us no room to live hand when tile brick base, build out our own palace, to become masters of their own spiritual home. Life is good, life is fragile, can not withstand the toss, only good care, will distribute the value it deserves!

We only learn to love yourself, will really know how to love this world!

[Guest ailiah]

This is a great site,i really learn from your post here,thanks a lot for sharing this....