IRS Walks Back September Date

Recent chatter about the new 457(f) regulations being published in September may have been premature.  Cheryl Press, the senior IRS attorney who was quoted as targeting the September date, on June 15 stated that her projection might be "wishful thinking." She noted that healthcare regulations continue to demand a lot of time. She continued, "We're very slim staffed and our higher-ups are at an even slimmer level.  And once we clear [the proposed regulations] through our building and work through everything, we have to get it through Treasury, and they're pretty slimly staffed too."

Regarding the substance of the new regulations, Press reiterated that the regulations will be "similar" to the 409A rules (e.g., disallow pre-tax voluntary deferrals and the use of noncompete restrictions to defer taxes), but that the IRS is not "going to worry about having everything being exactly the same as 409A."

For those keeping track, August 2011 will be the fourth anniversary of the original IRS announcement that it would publish the new regulations.  Only time will tell how much longer we must wait.