The Section 409A rules do not apply to an independent contractor, as opposed to an employee or a member of the board of directors of a corporation, under a special independent contractor analysis provided under the Section 409A regulations. Under Section 409A, the term service provider captures executives and other employees as well as certain independent contractors, including directors. Similarly, Section 409A rules use the term service recipient for any entity that retains, hires, or receives services from a service provider (along with affiliated entities within the same payments are considered a form of deferred compensation subject to Section 409A unless an exception or exemption applies. Failure to comply with Section 409A results in full taxation of all deferred compensation of the same type, plus a 20% penalty tax, plus interest if compensation was deferred in a year before the year of the violation. This Note describes different types of severance benefits