IRS Establishes Limited Correction Program Under Code Section 409A

On December 3, 2007, the IRS issued Notice 2007-100 (the "Notice"), which sets forth a limited correction program for unintentional operational failures under Code section 409A and solicits comments on a more expansive correction program. If the requirements of the Notice are met:

• Certain operational failures that are corrected during the year the failure occurs will not result in section 409A violations.
• Certain operational failures that occur in years before 2010 and involve only limited amounts (e.g., $15,500 or less in 2007/2008) may be corrected within two years. Only the amounts involved in such a failure will be subject to adverse treatment under section 409A.