Wednesday, January 21, 2009

Tax Pros Make Grim Predictions for Companies that Missed 409A Deadline

Companies may need to offer employees cash make-whole bonuses, or face litigation.

"“If I’m an employee who for whatever reason is assessed a penalty because their employer did not meet 409A requirements, about the only remedy at this point — assuming that employer is willing because they might not have responsibility or liability — is to bonus the employee to cover the penalty and income tax from the bonus itself,” said Sonia Agee, a tax attorney at Hoge, Fenton, Jones & Appel Inc. in San Jose."

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