IRS Suspends Deferred Compensation Reporting and Withholding Requirements

The Internal Revenue Service (IRS) issued Notice 2005-94 on December 8, 2005, which suspends the deferred compensation reporting requirements imposed under Section 409A of the Internal Revenue Code (the Code) for the 2005 calendar year. Section 409A was added to the Code by the American Jobs Creation Act of 2004 and imposes a wide variety of new requirements on employers that maintain nonqualified deferred compensation plans. Employers have found it difficult to determine the scope of the Section 409A reporting requirements and have encountered a number of computer system difficulties while trying to implement them.

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