IRS Hit with NQDC Plan Reporting Delay Request

November 29, 2005 ( - A compensation trade group has asked federal officials to put off certain reporting requirements for nonqualified deferred compensation (NQDC) plans.

The National Association of Tax Reporting and Payroll Management (NATRPM) made the request to Internal Revenue Service (IRS) to waive the 2005 Form W-2 and Form 1099-MISC reporting requirements of tax code Section 409A, BNA reported. By delaying the reporting requirements until 2006, the group said IRS would have time to issue new guidance and taxpayers would have an opportunity to analyze the rules and develop safe implementation strategies.

“It is imperative that the reporting requirements be delayed until 2006,” the association said in comments filed with IRS. NATRPM said its concern is that last minute guidance needed to assist taxpayers in complying with the new reporting requirements “cannot possibly be implemented in time to meet 2005 tax filing deadlines.”

Section 409A was added to the tax code by the American Jobs Creation Act of 2004. It requires reporting of amounts deferred under a nonqualified deferred compensation arrangement on Form W-2, Box 12, Codes Y and Z, for employees, and on Form 1099-MISC, Boxes 15a and 15b, for nonemployees.

NATRPM is a nonprofit association of senior managers who control preparation of payroll, employment taxes, and other tax information reporting and withholding of large US institutions.