IRS Extends Effective Date of 409A Again

The IRS has issued Notice 2007-86 which delay the effective date of the Proposed Regs under Section 409A until January 1, 2009 and by generally extending earlier transitional relief. This provides taxpayers additional transitional relief to come into compliance with forthcoming final regs.

Options granted before 2009 won't be considered as violating 409A as long as it is operated in reasonable, good faith compliance with 409A and guidance with effective date before 2009. Now companies are required to comply with the final regs' which have been issued.

The actual notice can be seen at http://www.irs.gov/pub/irs-drop/n-07-86.pdf

For questions or comments, please feel free to contact Alan Olsen at (510) 797-8661 x249 or aOlsen@groco.com

For more information go to:

409A Valuation Issues Q&A