That was the word Thursday from the Internal Revenue Service (IRS) in Notice 2009-49 about whether getting bailout money under the Emergency Economic Stabilization Act (EESA) represents a “change in control” and, therefore, a permissible triggering event for a NQDC payment.
Tax agency officials said the guidance applies when the U.S. Treasury Department receives an equity stake or warrants allowing it to purchase stock in a company as part of delivering bailout assistance to the issuing company.
Permitting a 409A payment could be contrary to the public interest because it might reduce the available liquidity of a company seeking government help, the IRS said.
The guidance is effective immediately. The IRS release is available here .
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