In late August and early September, the IRS sent compliance check questionnaires to 200 tax-exempt entities that sponsor nonqualified deferred compensation plans for some groups of highly compensated employees, managers, directors or officers under IRC Section 457(b) (See our July 26, 2013, blog post for more information). The purpose of the questionnaire was to determine if any issues crop up that indicate the agency might need to provide clarification and guidance in the future.

Based on the information provided, which indicated "a bit of a disconnect between [plan sponsors'] knowledge and the regulations" put out by the IRS, the agency might on a case-by-case basis move forward with an audit of any of these plans – known as "Top Hat" plans – or allow corrections under the Voluntary Correction Program, BNA reports. For more information, read the following IRS documents: "Non-Governmental 457(b) Deferred Compensation Plans" and "Employee Plans Compliance Unit (EPCU) – Non-Governmental 457(b) Plans Project."