The IRS announced Friday that it has selected 50 companies to get a special 409A audit. The lucky winners had already won the audit lottery by being selected for an employment tax audit. In the 409A component, the IRS auditors will be looking at:
- initial deferral elections;
- subsequent deferral elections; and
- payments, including the six-month delay for specified employees.
The inclusion of the six-month delay indicates that all of the recipients of this IRS 409A review will be public companies. The focus will be on the top 10 highest compensated employees.
There may be time for a quick self-audit of your 409A plans before the IRS information request hits your desk or maybe your good fortune will keep you off the list. Feeling lucky today?