You'll owe regular taxes plus a hefty 20% penalty tax on the whole balance (including earnings), and interest on the taxes that would have been due originally on the wrongly deferred pay.

FORBES: A Decision That Can't Be Deferred

If the IRS later determines an employee's original deferral violated some new rule (say, just missing a deadline for deciding to defer pay), he'll have to pay regular taxes and the 20% penalty tax on the whole balance (including earnings).

FORBES: Strings Attached