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IRS Announces New Program to Audit 409A Compliance

The IRS is getting ready to ramp up enforcement of Section 409A compliance with respect to non-qualified deferred compensation arrangements.  This new compliance initiative project (“CIP”) for Section 409A will focus on fifty large companies.  However, this foreshadows a much broader Section 409A enforcement initiative. 
The Service plans to issue Information Document Requests (“IDRs”) to about 50 large employers.  These initial IDRs will request documents regarding deferred compensation elections and payouts. 
This article examines the planned IDRs and implications for employers who are encouraged to start a self-audit for 409A compliance and address any deficiencies before the IRS begins an inquiry of their firm.