A Practice Note explaining the application of Section 409A of the Internal Revenue Code, relating to nonqualified deferred compensation plans, to various types of severance benefits. While some severance payments may be exempt from Section 409A because they qualify as short-term deferrals or fall under another exception explained in the Note, Section 409A needs to be considered and addressed whenever severance is being offered to ensure that it is structured in a manner that does not violate Section 409A.