118 STAT. 1638 PUBLIC LAW 108–357—OCT. 22, 2004 plan, there is a transfer of property within the meaning of section 83 with respect to such compensation as of the earlier of— ‘‘(A) the date on which the plan first provides that assets will become restricted to the provision of benefits under the plan in connection with a change in the employer’s financial health, or ‘‘(B) the date on which assets are so restricted, whether or not such assets are available to satisfy claims of general creditors. ‘‘(3) INCOME INCLUSION FOR OFFSHORE TRUSTS AND EMPLOYER’S FINANCIAL HEALTH.—For each taxable year that assets treated as transferred under this subsection remain set aside in a trust or other arrangement subject to paragraph (1) or (2), any increase in value in, or earnings with respect to, such assets shall be treated as an additional transfer of property under this subsection (to the extent not previously included in income). ‘‘(4) INTEREST ON TAX LIABILITY PAYABLE WITH RESPECT TO TRANSFERRED PROPERTY.— ‘‘(A) IN GENERAL.—If amounts are required to be included in gross income by reason of paragraph (1) or (2) for a taxable year, the tax imposed by this chapter for such taxable year shall be increased by the sum of— ‘‘(i) the amount of interest determined under subparagraph (B), and ‘‘(ii) an amount equal to 20 percent of the amounts required to be included in gross income. ‘‘(B) INTEREST.—For purposes of subparagraph (A), the interest determined under this subparagraph for any tax able year is the amount of interest at the underpayment rate plus 1 percentage point on the underpayments that would have occurred had the amounts so required to be included in gross income by paragraph (1) or (2) been includible in gross income for the taxable year in which first deferred or, if later, the first taxable year in which such amounts are not subject to a substantial risk of for feiture. ‘‘(c) NO INFERENCE ON EARLIER INCOME INCLUSION OR REQUIRE MENT OF LATER INCLUSION.—Nothing in this section shall be con strued to prevent the inclusion of amounts in gross income under any other provision of this chapter or any other rule of law earlier than the time provided in this section. Any amount included in gross income under this section shall not be required to be included in gross income under any other provision of this chapter or any other rule of law later than the time provided in this section. ‘‘(d) OTHER DEFINITIONS AND SPECIAL RULES.—For purposes of this section: ‘‘(1) NONQUALIFIED DEFERRED COMPENSATION PLAN.—The term ‘nonqualified deferred compensation plan’ means any plan that provides for the deferral of compensation, other than— ‘‘(A) a qualified employer plan, and ‘‘(B) any bona fide vacation leave, sick leave, compen satory time, disability pay, or death benefit plan. ‘‘(2) QUALIFIED EMPLOYER PLAN.—The term ‘qualified employer plan’ means—
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