Change in tax status of employer with 409A plan

[Guest buffalo06]

Scenario: taxable organization provides NQDCP subject to 409A. Benefits under the plan are not subject to SROF. The organization freezes deferrals to the plan but otherwise intends to maintain the plan while benefits are paid out according to the plan. Meanwhile, the organization changes its own tax status to a tax exempt organization.

Question: would the plan, which is now maintained by a tax exempt entity, be subject to section 457(f) (assuming its not an eligible plan), causing the deferrals under the plan to be taxable as they are no longer subject to SROF? I think so, but would like others' input.

Thanks in advance.

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[Guest mae.c]

Scenario: taxable organization provides NQDCP subject to 409A. Benefits under the plan are not subject to SROF. The organization freezes deferrals to the plan but otherwise intends to maintain the plan while benefits are paid out according to the plan. Meanwhile, the organization changes its own tax status to a tax exempt organization.

Question: would the plan, which is now maintained by a tax exempt entity, be subject to section 457(f) (assuming its not an eligible plan), causing the deferrals under the plan to be taxable as they are no longer subject to SROF? I think so, but would like others' input.

This may be too late to be helpful, but there is a recent PLR in this area -- PLR 201103002, which holds:

"Provided that X adopts and implements its corporate resolution freezing and barring any additional deferrals to its three NQDC plans described in this letter after X receives a favorable determination letter establishing its status as a tax exempt organization, these three NQDC plans will not be subject to section 457."

http://www.irs.gov/pub/irs-wd/1103002.pdf

[Guest Luzifull22]

yess Ok Thankss! :P :P

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