The Internal Revenue Service has issued Notice 2010-80, modifying previous guidance on correction procedures for non-qualified deferred compensation plans covered by Internal Revenue Code Section 409A. 

Section 409A, which was enacted in 2004, imposes a variety of rules and requirements on non-qualified deferred compensation arrangements. Section 409A defines deferred compensation broadly and, in addition to traditional deferred compensation agreements, includes severance arrangements and equity-based plans. Generally, the Section 409A rules govern the timing of deferral elections, distribution requirements and changes in distribution elections.

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