IRS Pub.: Nonqualified Deferred Compensation Audit Technique Guide on Treatment of Deferred Amounts (IRC §409A)

Publication 5528 (revised June 1, 2021) provides technical guidance on auditing nonqualified deferred compensation (NQDC) plans, addressing when deferred amounts are includible in employee’s gross income, when they are deductible by the employer, and when they are considered for employment tax purposes, particularly given the advent of tax code Section 409A and Section 457A in the 2000s. Examination techniques relate to interviewing company personnel most knowledgeable on executive compensation practices; reviewing deferred election forms, executive compensation disclosures, and ledger accounts; and determining plan administration and funding arrangements. The examiner should get answers to certain questions, requesting documentation where ...