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The "A" List Grows: The Impact of Code Section 457A on Deferred Compensation
Thursday, September 17, 2009
- Location -
New York Hotel Pennsylvania
401 Seventh Avenue (at 33rd St.)
New York, NY
(212) 736-5000
7.5 MCLE Credits including 0.5 ethics credits
Section 409A of the Internal Revenue
Code, previously the subject of a full-day NYSBA program, fundamentally
changed the way in which nonqualified deferred compensation is provided
to executives and other service providers. Now, new Section 457A of the
Code, enacted as part of the Emergency Economic Stabilization Act of
2008, establishes rules for including in gross income certain
compensation deferred under “nonqualified deferred compensation
plans” of “nonqualified entities.” Section 457A limits
or eliminates the ability of certain entities to provide tax-deferred
compensation to its service providers. Initially, it appeared to some as
though the primary target of the legislation was compensation paid to
managers of offshore hedge funds, but it has since become apparent that
the scope of the new rules reaches to certain other offshore entities
and to a number of domestic entities as well.
This upcoming full-day program on Section 457A,
featuring experienced private tax and employee-benefits practitioners,
and senior government officials with responsibility for interpreting and
administering the new rules, will cover many of the important issues
that employers and other businesses, employees and their respective
advisors face as they try to understand how the new rules will apply to
a broad array of compensation arrangements. Treasury representatives in
the benefits, partnership and international areas are scheduled to
participate throughout the entire day, so that attendees may have the
opportunity to obtain a unique insight into the government’s
perspective on a wide range of issues. The panelists will consider the
latest IRS rules and notices, including Notice 2009-8, and will also
discuss issues that may be addressed in pending regulatory
initiatives.
The panelists will begin by addressing
generally the definitions of “nonqualified deferred compensation
plan,” “nonqualified entity,” “short term
deferral” and “substantial risk of forfeiture.” The
panelists will also compare and contrast other similar rules (e.g.,
those under Sections 83 and 409A), and examine the application of
Section 457A to equity-based compensation.
Later, special concerns will be addressed
regarding what entities are caught by the Section 457A web, including
whether and when a partnership is a “nonqualified entity.”
On the international front, panelists will address requirements for
avoiding adverse Section 457A consequences under rules to determine
whether substantially all of the income of the sponsor of a foreign plan
is subject to a comprehensive foreign income tax. The discussion will
extend to policy considerations, and the prospects for revision of the
relevant tests.
A critical emerging issue has been the manner
in which Section 457A applies in the context of a customary fund
structure under which certain investments may be placed in separate
vehicles or otherwise ringfenced. One of the day’s sessions will
be devoted to a discussion of this practice of using so-called
“side pockets” and the manner in which Section 457A may
apply to those arrangements.
The numerous difficulties engendered by Section
457A extend to existing arrangements. These difficulties are exacerbated
by the relative lack of initial awareness regarding Section 457A, and a
misunderstanding of the breadth of its impact by a number of taxpayers
and practitioners. Among the topics to be covered will be a discussion
of the transition rules set forth in Notice 2009-8 and related
grandfathering considerations.
Please join us for what promised to be a lively,
informative and insightful set of presentations.
This course includes 7.5 hours of credit for the
continuing professional education requirements of New York and New
Jersey CPAs. New York sponsor number: 000026; New Jersey sponsor number:
20CE0009900.
Program Agenda
8:30-9:00 a.m. REGISTRATION (outside meeting room)
9:00-9:15
INTRODUCTION AND OVERVIEW
9:15-10:45
BENEFITS (AND RELATED) ISSUES
• Definition of “nonqualified deferred compensation
plan,” including issues surrounding “substantial risk of
forfeiture” and short-term deferrals
• Identifying the “sponsor” of a plan
• Plan aggregation
• Coordination with Section 457(f)
• Employee transfers between affiliated sponsors
• Equity compensation issues, including issues relating to options
and stock-settled stock appreciation rights, and certain possible
limitations (e.g., where there is an immediate put)
10:45-11:00 Coffee Break
11:00-12:00
“COMPREHENSIVE FOREIGN INCOME TAX” AND TREATY
ISSUES
• Policy considerations
• Definition of comprehensive foreign income tax
• Includible income and applicable exclusions under the
“substantially all” test
• Application of “substantially all” test where
country of residence has territorial system
• Importance of corporate structure
• Compliance and audit issues
12:00-1:00 p.m.
PARTNERSHIP ISSUES
• Overview of the application of Section 457A and Notice 2009-8 to
partnerships
• Tax-exempt and foreign-ownership issues
• Allocations of gross income
• Documentation and compliance issues for nonqualified
entities
• Policy issues
1:00-2:15 LUNCH (on your own)
2:15-3:15
CERTAIN FUND INVESTMENTS – “SIDE POCKETS” AND RELATED
ISSUES
• What is a side pocket?
• How Section 457A impacts side pockets
• Does the statute work as intended?
• Structuring alternatives
• Prospects for rule changes
3:15-3:45
TRANSITION RULES
• Key Section 457A transition rules and applicable deadlines
• Identification and quantification of grandfathered amounts
• Coordination of Section 457A with Section 409A
• Discussion of open transition questions
3:45-4:00 Coffee/Soft Drink Break
4:00-5:00
PROCEDURAL ISSUES RELATING TO SECTION 457A COMPLIANCE, INCLUDING
INFORMATION, PREPARER AND "CIRCULAR 230" ISSUES; FOLLOWED BY A
ROUNDTABLE DISCUSSION AMONG THE TREASURY REPRESENTATIVES IN
ATTENDANCE
5:00 p.m. ADJOURNMENT
Program Faculty
Overall Planning Chair and Moderator
Andrew L. Oringer, Esq.
Ropes & Gray LLP
—New York City
Speakers (in alphabetical order)
Andrew H. Braiterman, Esq.
Hughes Hubbard & Reed LLP
—New York City
Jonathan P. Brose, Esq.
Sidley Austin LLP
—New York City
Bryon A. Christensen, Esq.
United States Department of the Treasury
—Washington, D.C.
Jean Cogill, Esq.
Bingham McCutchen LLP
—New York City
Jason R. Factor, Esq.
Cleary Gottlieb Steen & Hamilton LLP
—New York City
Robert H. Frastai, Esq.
Weil, Gotshal & Manges LLP
—New York City
Steven G. Frost, Esq.
United States Department of the Treasury
—Washington, D.C.
David E. Kahen, Esq.
Roberts & Holland LLP
—New York City
Helen H. Morrison, Esq.
U.S. Department of the Treasury
—Washington, D.C.
Michael Nissan, Esq.
Weil, Gotshal & Manges LLP
—New York City
Amanda H. Nussbaum, Esq.
Proskauer Rose LLP
—New York City
Regina Olshan, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
—New York City
Michael H. Plowgian, Esq.
U.S. Department of the Treasury
—Washington, D.C.
Edward J. Rayner, Esq.
Katten Muchin Rosenman LLP
—New York City
Susan E.Stoffer, Esq.
Seyfarth Shaw LLP
—Atlanta, GA
Willard B. Taylor, Esq.
Sullivan & Cromwell LLP
—New York City
(Attend in Person or via Webcast)
Directions
(Across from Penn Station/Madison Square Garden) Transportation:
Metroplitan Transportation: Subways: A, C, E, B, D, F, Q, N, R, 1,2, 3
& 9 Buses: M16, M34, M4, M10, M20 & Q32 Pennsylvania Rail Road
Station: Long Island Railroad, Amtrak & NJ Transit (all trains)
The last day to pre-register online was September 16, 2009.
Members, please login to get member discounts.
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