Eaton Peabody

Notice on Reporting and Withholding on Amounts Includible in Income Under Code Section 409A

The IRS issued Notice 2006-100 on November 30, 2006 to provide guidance on reporting and withholding requirements for 2005 and 2006 with respect to deferred compensation and amounts required to be included in gross income under Section 409A. For 2005 and 2006, deferrals of compensation that are not required to be included in income under Section 409A need not be reported on Form W-2 or Form 1099-MISC. However, if amounts are required to be included in income under Section 409A, such amounts must be reported on Form W-2 or Form 1099-MISC, as appropriate, for 2005 and 2006.

The IRS provides interim guidance in this Notice with regard to how to calculate amounts includible in gross income for 2005 and 2006. Additional guidance is expected for future years. If you have any questions or if you need guidance on how to meet your reporting and withholding obligations in light of the Notice, please contact Christine Burke Worthen, a shareholder in Eaton Peabody's Tax Practice Group.

This alert is provided as general information, and is not a substitute for legal or other professional advice.