CLIENT UPDATE - Interim Guidance Issued on Offshore Deferred Compensation Law

New Section 457A of the Internal Revenue Code severely restricts post-2008 offshore fee deferrals by treating vested fees as current income, regardless of whether actually paid. Under Section 457A, after 2008, the tax treatment of unvested offshore fee deferrals remains unchanged such that they are not recognized as current income until the deferrals are no longer subject to vesting.