Tax News

CCH (cch.taxgroup.com) reports:

The IRS has issued guidance affirming that the new rules under Code Sec. 409A will have no effect on the way teachers salaries will be taxed in the coming school year. The IRS stressed that school districts are not required to offer an annualization election (i.e. deferred compensation) under the new rules; however, those that do offer the election will be required to make some changes to their plan. Since the new rules, which were finalized in April 2007, do not apply to elections made for school years beginning prior to January 2008, school districts will have ample time to make any required changes to their plan, and their employees will not be subject to additional taxes. The IRS anticipates any changes that need to be made will be minor. Further information is available on-line at www.irs.gov.
IR-2007-142, 2007FED ¶46,578
FAQs: Sec. 409A and Deferred Compensation
Other References:
Code Sec. 409A
CCH Reference - 2007FED ¶18,960.062
CCH Reference - 2007FED ¶18,960.042
Tax Research Consultant
CCH Reference - TRC COMPEN: 15,066
CCH Reference - TRC PLANRET: 3,206.35