I have not seen the (costly)referendum that was sent out for members of the tribe to vote on but I understand the question is 'should the tribe comply with IRS section 409A?'
After you determine whether or not this has anything to do with your personal finances, you might want to ask yourself why the tribe chose to spend the money on a referendum asking you to decide on such a complicated tax issue that most of you know nothing about nor would you be expected to. Which services did they cut to pay for the referendum?
Secondly, you need to make sure that it is only compliance with IRS section 409A that you are voting on and not other hidden issues related to the boards retirement plan. The way I read section 409A, the question is simple....Should the tribe comply with IRS rules or not?
Call your tax preparer to see if and how 409A compliance affects you or if it does. You can go to the IRS website and read about the IRS rules regarding section 409A but here are a few excerpts from the IRS website regarding 409A.
What is §409A?
§409A was enacted in October 2004 and was generally effective on January 1, 2005. It applies to compensation that workers earn in one year, but that is paid in a future year. This is referred to as nonqualified deferred compensation. This is different from deferred compensation in the form of elective deferrals to qualified plans (such as a 401(k) plan) or to a 403(b) or 457(b) plan.
How does coverage under §409A affect an employee’s taxes?
If deferred compensation meets the requirements of §409A, then there is no effect on the employee’s taxes. The compensation is taxed in the same manner as it would be taxed if it were not covered by §409A.
If the arrangement does not meet the requirements of §409A, the compensation is subject to certain additional taxes, including a 20% additional income tax. §409A has no effect on FICA (Social Security and Medicare) tax.
Section 409A provides certain requirements applicable to nonqualified deferred compensation plans. If a plan does not meet those requirements, participants in the plan are required to immediately include amounts deferred under the plan in income and pay additional taxes on such income.
The Treasury Department and the IRS issued final regulations under § 409A in April 2007 (72 Fed. Reg. 19234 (April 17, 2007)). The final regulations apply to taxable years beginning on or after January 1, 2008. In general, the final regulations require that the material terms of a nonqualified deferred compensation plan be in writing. See § 1.409A-1(c).
Commentators stated that taxpayers anticipate difficulties in formally amending existing plans to comply with the final regulations by the January 1, 2008 deadline. In addition, a number of commentators have raised questions regarding the application of the final regulations to certain types of plans. This notice is issued in response to these comments and questions.
III. 2008 TRANSITION RELIEF
A. In General
Section 409A generally applies to amounts deferred under a nonqualified deferred compensation plan to the extent the amounts deferred under the plan were not earned and vested before January 1, 2005.
The final regulations are applicable for taxable years beginning on or after January 1, 2008, and a nonqualified deferred compensation plan must meet the requirements set forth in the final regulations as of the first day of the taxable year. This section provides certain limited transition
relief,until December 31, 2008, with respect to the plan document requirements.
IRS Deferred Compensation Plan
After you determine whether or not this has anything to do with your personal finances, you might want to ask yourself why the tribe chose to spend the money on a referendum asking you to decide on such a complicated tax issue that most of you know nothing about nor would you be expected to. Which services did they cut to pay for the referendum?
Secondly, you need to make sure that it is only compliance with IRS section 409A that you are voting on and not other hidden issues related to the boards retirement plan. The way I read section 409A, the question is simple....Should the tribe comply with IRS rules or not?
Call your tax preparer to see if and how 409A compliance affects you or if it does. You can go to the IRS website and read about the IRS rules regarding section 409A but here are a few excerpts from the IRS website regarding 409A.
What is §409A?
§409A was enacted in October 2004 and was generally effective on January 1, 2005. It applies to compensation that workers earn in one year, but that is paid in a future year. This is referred to as nonqualified deferred compensation. This is different from deferred compensation in the form of elective deferrals to qualified plans (such as a 401(k) plan) or to a 403(b) or 457(b) plan.
How does coverage under §409A affect an employee’s taxes?
If deferred compensation meets the requirements of §409A, then there is no effect on the employee’s taxes. The compensation is taxed in the same manner as it would be taxed if it were not covered by §409A.
If the arrangement does not meet the requirements of §409A, the compensation is subject to certain additional taxes, including a 20% additional income tax. §409A has no effect on FICA (Social Security and Medicare) tax.
Section 409A provides certain requirements applicable to nonqualified deferred compensation plans. If a plan does not meet those requirements, participants in the plan are required to immediately include amounts deferred under the plan in income and pay additional taxes on such income.
The Treasury Department and the IRS issued final regulations under § 409A in April 2007 (72 Fed. Reg. 19234 (April 17, 2007)). The final regulations apply to taxable years beginning on or after January 1, 2008. In general, the final regulations require that the material terms of a nonqualified deferred compensation plan be in writing. See § 1.409A-1(c).
Commentators stated that taxpayers anticipate difficulties in formally amending existing plans to comply with the final regulations by the January 1, 2008 deadline. In addition, a number of commentators have raised questions regarding the application of the final regulations to certain types of plans. This notice is issued in response to these comments and questions.
III. 2008 TRANSITION RELIEF
A. In General
Section 409A generally applies to amounts deferred under a nonqualified deferred compensation plan to the extent the amounts deferred under the plan were not earned and vested before January 1, 2005.
The final regulations are applicable for taxable years beginning on or after January 1, 2008, and a nonqualified deferred compensation plan must meet the requirements set forth in the final regulations as of the first day of the taxable year. This section provides certain limited transition
relief,until December 31, 2008, with respect to the plan document requirements.
IRS Deferred Compensation Plan
Bernard Bouschors Unit Report
One final comment. 
There is a referendum on resolution titled “Amending Board Retirement Plan.” The resolution that was approved is to amend the plan for compliance with the requirements of the Internal Revenue Service’s Code Section 409A. The plan was approved in 1998 for retired tribal board members. The changes have no impact on the current tribal board members. I support the change and ask you to do the same.
Thank you,
Bernard Bouschor, Unit I
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