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Revocation of 409A payments


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Would a service provider run afoul of 409A rules if he/she opted to forfeit all or any portion of his/her deferred compensation payment (the arrangement is currently in repayment as installments, treated as a single payment). No other benefits would be paid in exchange - he/she would just receive a lesser amount, payable over the same time period. There are obviously other tax considerations.

What if the service provider agreed to take a lesser amount but the amount would be paid over a specified period of time rather than life - I believe this would be subject to the subsequent deferral rules, is that correct? And if a series of installment payments (treated as a single payment) had already begun, then a subsequent election may not be made. Is this correct?

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