On Wednesday, the IRS announced what it called “relief” extending the “transition period” of compliance with 409A through January 1, 2008 (unless you are a public company and you are involved in a back dating scandal, then you are still hosed.)
What the IRS really means (as translated by my trusty sidekick Jason) is “We still can’t figure out how to implement this puppy, so we are telling y’all to keep complying the best you can (in good faith) and we’ll get back with you fine folks once we figure out what we meant in the first place.”
Bottom Line: Act as if 409A is alive and well. Refer to our prior posts if you are curious about our take on it. We continue to hope that someone important in Washington DC will wake up one day and realize how completely absurd 409A and kill it. Oh well – it’s good to have fantasies.