Katrina Aftermath Includes 409A Guidance

September 15, 2005 (PLANSPONSOR.com) - Hurricane Katrina has caused a delay in the issuance of the second round of guidance under Section 409A of the Internal Revenue Code, according to published reports.

A report by the Bureau of National Affairs cited comments by Internal Revenue Service Chief Counsel Donald Korb to the publication that the agency’s effort to provide hurricane relief has delayed guidance projects, including one on deferred compensation plans.  

Although no date was given for the release of the anticipated guidance, the Service indicated that it did expect to release it prior to year-end, according to the report.

The industry has speculated upon the possibility of an additional extension of time to bring plans into compliance beyond the December 31, 2005 deadline set forth in the earlier guidance issued by the IRS (see  Hurry Up—and Wait ).   This delay seems to make it increasingly likely that such an extension will be granted in this guidance (see  Getting a Breather ).