Rev. Proc. 2008-62 by ProQuest


Rev. Proc. 2008-62 sets forth the procedure by which the sponsor of a defined benefit plan, other than a multiemployer plan, may request and obtain approval for the use of plan-specific substitute mortality tables in accordance with Section 430(h)(3)(C) and Section 303(h)(3)(C) of ERISA, as amended.

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									    .02 Section 3.01 of Rev. Proc. 2008–3        Also, the Service has been unable to is-        whether a plan provides for the deferral of
reflects those areas in which rulings or de-     sue private letter rulings concerning issues    compensation under § 1.409A–1(b).
termination letters will not be issued with      arising under the Federal Insurance Con-
respect to specific questions and problems.      tributions Act (FICA) with respect to non-      SECTION 4. EFFECT ON OTHER
    .03 Section 5.08 of Rev. Proc. 2008–3        qualified deferred compensation.                REVENUE PROCEDURES
provides that the Service will not rule on           .08 In light of the final regulations be-
the tax consequences of arrangements de-         coming applicable on January 1, 2009, and         Rev. Proc. 2008–3 is modified and
scribed in § 409A, including rulings as to       the issuance of Notice 2007–100, the Ser-       amplified.
whether an arrangement is an arrangement         vice has decided to modify and amplify
                                                                                                 SECTION 5. EFFECTIVE DATE
described in § 409A.                             Rev. Proc. 2008–3. The Service will con-
    .04 Section 409A provides certain re-        tinue not to issue rulings concerning the          This revenue procedure applies to rul-
quirements applicable to nonqualified de-        income tax consequences of establishing,        ings and determination letters issued after
ferred compensation plans. If a plan does        operating, or participating in a nonquali-      September 25, 2008.
not meet those requirements, participants        fied deferred compensation plan described
in the plan are required to immediately in-      in § 409A, but the Service generally will       DRAFTING INFORMATION
clude amounts deferred under the plan in         rule on the application of certain other tax
income and pay additional taxes on such          law provisions (such as FICA and estate            The principal author of this revenue
income.                                          and gift taxes) to taxpayers who participate    procedure is Bill Schmidt of the Office of
    .05 The Treasury Department and the          in those plans. Specifically, rulings will      Division Counsel/Associate Chief Coun-
Service have issued final regulations un-        not be issued with respect to the following:    sel (Tax Exempt & Government Entities).
der § 409A (T.D. 9321, 2007–19 I.R.B.            the income tax (including income tax with-      For further information regarding this rev-
1123 [72 Fed. Reg. 19234] (April 17,             holding) consequences of establishing, op-      enue procedure, contact Mr. Schmidt at
2007)). The final regulations apply to tax-      erating, or participating in a nonqualified     (202) 622–6030 (not a toll-free call).
able years beginning on or after January         deferred compensation plan as defined in
1, 2009. Notice 2007–86, 2007–46 I.R.B.          § 1.409A–1(a); whether a plan is described
                                                                                                 26 CFR 601.201: Rulings and determination letters.
990. The final regulations define the terms      in § 1.409A–1(a)(3)(iv) (certain plans sub-
                                                                                                 (Also Part I, § 430.)
nonqualified deferred compensation plan          ject to a totalization agreement and sim-
and deferral of compensation for purposes        ilar plans) or § 1.409A–1(a)(3)(v) (cer-        Rev. Proc. 2008–62
of § 409A. See § 1.409A–1(a) & (b).              tain broad-based foreign retirement plans);
    .06 Since publication of the final reg-      whether a plan is a bona fide vacation
ulations, the Treasury Department and            leave, sick leave, or compensatory time         SECTION 1. PURPOSE AND
Service have issued Notice 2007–100,             plan described in § 1.409A–1(a)(5); and         CHANGES FROM REV. PROC.
2007–52 I.R.B. 1243, providing transi-           whether a plan provides for the deferral        2007–37
tional relief and guidance on the correction     of compensation under § 1.409A–1(b) (in-
of certain failures of a nonqualified de-        cluding whether an amount is a short-term          .01 The purpose of this revenue pro-
ferred compensation plan to comply with          deferral and whether certain stock rights,      cedure is to set forth the procedure by
§ 409A in operation. Section V of No-            foreign plans, and separation pay plans are     which the sponsor of a defined benefit
tice 2007–100 requests comments on all           subject to § 409A).                             plan, other than a multiemployer plan,
aspects of a potential corrections program                                                       may request and obtain approval for the
in which taxpayers could correct certain         SECTION 3. PROCEDURE                            use of plan-specific substitute mortality
failures to comply with § 409A(a) in the                                                         tables in accordance with § 430(h)(3)(C)
operation of a nonqualified deferred com-           Rev. Proc. 2008–3 is modified by             of the Internal Revenue Code (Code) and
pensation plan.                                  deleting section 5.08. Rev. Proc. 2008–3        § 303(h)(3)(C) of the Employee Retire-
    .07 Based on experience with the pri-        is amplified by adding the following to         ment Income Security Act of 1974, as
vate letter ruling program, the Service has      section 3.01:                                   amended (ERISA).
determined that section 5.08 of Rev. Proc.          Section 409A.—Inclusion in Gross                .02 This revenue procedure is an up-
2008–3 unnecessarily restricts the ability       Income of Deferred Compensation Un-             date of Rev. Proc. 2007–37, 2007–25
of the Service to issue private letter rulings   der Nonqualified Deferred Compensation          I.R.B. 1433. Rev. Proc. 2007–37 was
under Rev. Proc. 2008–1, 2008–1 I.R.B.           Plans.—The income tax consequences              based on the proposed regulations issued
1 and Rev. Proc. 2008–4, 2008–1 I.R.B.           of establishing, operating, or partici-         under § 430(h)(3)(C) of the Code and
121. For example, the existing no-rule pol-      pating in a nonqualified deferred com-          § 303(h)(3)(C) of ERISA published in
icy prevents the Service from issuing pri-       pensation plan within the meaning of            the Federal Register on May 29, 2007, at
vate letter rulings with respect to estate       § 1.409A–1(a); whether a plan is de-            72 FR 29456 [REG–143601–06, 2007–24
and gift tax consequences of propo
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