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ANALYSIS
March 2, 2009
Sagging Index no longer reflects what’s going on in the market, some say, Replacements? Google it, to start.
March 2, 2009
Downward price spiral will actually boost the cost of capital for most companies. CFOS, take note.
March 2, 2009
The latest bailout at AIG could be a preview of how the president will deal with Wall Street.
March 2, 2009
No corporate defaults. Big debt offerings. Percolating CP issuance. Things may be looking up in the capital markets.
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August 20, 2007 4:20 PM ET
A coalition of more than 80 law firms is seeking to have the Internal Revenue Service deadline for complying with new non-qualified deferred compensation plan regulations extended by one year, arguing the tax agency hasn’t given them enough time to comply. Regina Olshan, an employee benefits specialist at law firm Skadden Arps, which is spearheading the effort, said a “who’s who of law firms” was planning to send a letter to IRS acting commissioner Kevin Brown Tuesday morning seeking the delay. The “very short” letter requests an extension of 409A compliance to Dec. 31, 2008, from the same date this year, she said. “We’re basically saying that we have extensive experience in this issue, and the IRS hasn’t given us enough time, and they haven’t given corporate America enough time,” said Ms. Olshan. “As a result there will be many errors, and the consequences will fall on the innocent employees, who often don’t have anything to do with the company’s compliance program and have no idea if they have a 409A issue.” One of the biggest concerns of lawyers has been that employers don’t realize that the new rules—finalized by the IRS in April—may now treat bonuses, severance packages and common pay programs such as stock options as deferred compensation, which will therefore be subject to stricter standards. Under the new rules, employees will be hit with a 20% tax penalty on their deferred compensation if their employers are not in compliance. “Every employment agreement has to be amended by the end of the year,” said Ms. Olshan. “Does that sound like something that can be done well? The IRS has to ask: Do they want compliance or is this just a revenue generator. Right now there could be massive non-compliance.” Section 409A was enacted by Congress in 2004 to combat abuses of non-qualified deferred-comp plans; most notably, executives at Enron took their deferred compensation and ran as the company went belly-up. The new rules are meant to set tougher guidelines on when and how the money is set aside, and when it can be cashed out. Andrew Desouza, a spokesman for the Treasury Department, which oversees the IRS, said there are currently no plans to change the 409A deadline. Earlier this month, William Schmidt, senior executive compensation counsel in the IRS’s tax-exempt and government entities division, told an audience at the annual meeting of the American Bar Association that it was “unlikely” the government would provide an extension for 409A, according to a report from BNA.
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