Lori Basilico, a partner in Edwards Wildman's
Tax and Benefits Department in Providence, analyzed the ramifications of a recent judicial victory for the Internal Revenue Service on deferred compensation in Compliance Week. In the article, "Court Ruling Buoys IRS's Hard Line on Deferred Compensation
," Basilico said, “For the IRS to slap this penalty on a taxpayer who it seems tried to comply with 409A is a little disheartening." The article noted that Congress enacted Section 409A in 2004 with a broad mandate to address concerns that executives were deferring taxable compensation into the future to delay the tax consequences, with the IRS then writing regulations and transition guidance to specify how it would apply the statute. “It took a long time for the regulations to be issued. The IRS engaged substantial good-faith interpretation periods and extended compliance into 2008," added Basilico.