First the bad news: when it comes to 409A violations, the most common sources are employment agreements and releases.  With surprising frequency, employers encounter 409A problems due to conditions timing severance pay to an employee's execution of a claims release.  Other common sources for 409A problems arise from allowing employees to choose between receiving their severance in lump sums or installments, or receiving cash-outs of employer-paid COBRA coverage. 

Now the good news: a 2015 IRS Chief Council Memo supports the correction of defective severance provisions if that occurs in the year before a termination of employment occurs.  The IRS memo was actually unfavorable to the taxpayer, because it rejected a 409A correction that took place in the year severance occurred.  While time remains this year, it is worth reviewing any agreements, plans, or releases that provide for severance.