TaxNewsFlash-Exempt Organizations

July 23, 2007
No. 2007-86
    
 

Future IRS Guidance to Address Certain Definitions of Nonqualified Deferred Compensation Plans of State and Local Governments and Tax-Exempt Entities

The IRS today released an advance copy of Notice 2007-62 which announces that the IRS and Treasury Department intend to issue guidance under section 457 with respect to nonqualified deferred compensation plans of state and local governments and tax exempt entities.

Specifically, the anticipated guidance will address the definitions of:

  • A bona fide severance pay plan under section 457(e)(11)
  • A substantial risk of forfeiture under section 457(f)(1)(B)

Notice 2007-62 also describes the future guidance which, according to the IRS, in many respects would be similar to the rules in the recent final regulations under section 409A.

The IRS has requested comments on the issues intended to be addressed in the future guidance. Comments must be received by October 15, 2007.

For an electronic version of the notice: Notice 2007-62

Notice 2007-62 will appear in Internal Revenue Bulletin 2007-32, dated August 6, 2007.
 

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