If a plan violates 409A and a participant incurs 409A penalties, and then the employer reimburses the penalties, the reimbursement would be taxable income to the participant. Would the reimbursement also be subject to 409A penalties? I thought the answer was yes, but I can find no support for that conclusion.

Additional checking continues to turn up no support for applying 409A penalties to employer 409A penalty reimbursements. On the face of the statute, so long as the reimbursement is not in the plan documentation or otherwise promised in advance in a legally binding way, it seems that the employer payment would not be deferred compensation to which the penalty would apply.

The receipt of the reimbursement should be included in the EE's current taxable income.

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Without extensively researching the regulations, I would agree with your conclusion. So long as the right to reimbursement of taxes is not legally binding in the Plan document, you should be fine. Most plans I worked with or drafted include that provision but read that the Employer "may" reimburse participants for taxes in any amount the employer determines. I believe this avoids the issue of the payment of taxes being "deferred compensation" because pursuant to this langauge, the Employer has full discretion whether or not to make the reimbursement and also the amount of that reimbursement.