IRS Official: 457(f) Guidance to Be Used to 'Clean Up' 409(A) Regulations

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IRS will use proposed rules for Internal Revenue Code Section 457(f) regulations, dealing with deferred compensation plans available primarily through nonprofit entities and government employers, to correct minor errors in Section 409A, an IRS official says. Stephen B. Tackney, special counsel to the Division Counsel/Associate Chief Counsel (Tax Exempt and Government Entities), says the “clean up” of Section 409A would involve technical items that need to be corrected. As an example, Tackney notes that the current Section 409A regulations dealing with the ability to terminate deferred compensation plans that are in bankruptcy includes the incorrect Bankruptcy Code section.