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Individual Asks for Guidance on Required Minimum Distributions

JUN. 12, 2020

Individual Asks for Guidance on Required Minimum Distributions

DATED JUN. 12, 2020
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Submitter Information

Submitter Name: Barnet Phillips

City: GREENWICH

Country: United States

State or Province: CT

  • Docket ID: IRS-2020-0015

  • Document Type: Public Submission

  • Document Subtype: Public Comment

  • Status: Posted

  • Received Date: Jun 12, 2020

Comment

Section 2203 of the CARES Act, inter alia, added Section 401(a)(9)(l) to the Internal Revenue Code that in general temporarily waived for the calendar year 2020 the required minimum distribution rules for Section 401(k) and other retirement plans. In addition, Section 402(c)(4) was also correspondingly amended to provide tax free roll over contributions of such distributions back to such plans. Such roll over contributions, however, by statute must comply with the time limit on such transfers set out in Section 402(c)(3). Section 402(c)(3)(B) provides a hardship exception permitting the Secretary of the Treasury to waive the 60-day requirement.

Such CARES ACT amendments mimic the prior amendments to the Code provided in the Worker, Retiree, and Employer Recovery Act of 2008 ("WRERA"), P.L. 110-458. In connection with the prior WRERA amendments, Notice 2009-82 among other things "sets out rollover relief with respect to waived required minimum distributions and certain related payments, including an extension of the 60-day rollover period to November 30, 2009 for certain of the distributions."

On behalf of myself and all similarly situated individual taxpayers, I wish to advocate for an issuance of a Notice similar to Notice 2009-82 in connection with the aforementioned CARES Act amendments.

Like myself, individual taxpayers may have taken distributions from qualified plans in January of 2020. When the CARES ACT was enacted on March 27, 2020, the statutory period for a tax-free roll over of such distributions had already passed. In addition, only well informed taxpayers may have been aware of the statutory 60-day time period required for such roll-over contributions and may have inadvertently and innocently missed the deadline.

Accordingly, I am formally requesting that a Notice similar to Notice 2009-82 be issued expressly waiving the 60-day requirement in connection with such CARES Act amendments. The Secretary has the express power to do this, and should do this, pursuant to Section 402(c)(3)(B) of the Code. As noted above, the amendments to the Code that provided temporary waivers of the required minimum distribution rules by the CARES Act are identical to the ones provided by WRERA in 2009. The pandemic is clearly as much as, if not greater than, the financial crisis the type of "casualty, disaster, or other events beyond the reasonable control of the individual. . . ." contemplated by Section 402(c)(3)(B).

Such guidance explicitly complies with most of the requirements set forth in Notice 2020-47:

1. The guidance applies to all individuals who received distributions from qualified plans in early 2020 that were unable to avail themselves of the 60-day roll over contribution period (or who innocently and unknowingly passed the deadline for such action).

2. The guidance lessens the burden on the Service and taxpayers since there will be no need to distinguish between distributions received in early 2020 (i.e.January) versus distributions taken in February or March 2020 which could qualify for the 60-day roll over period.

3. The guidance applies to the CARES Act, which was just enacted on March 27,2020.

4. The guidance does not apply to existing regulations.

5. Since the guidance does not apply to existing regulations or Executive Orders, 13771, 13777, and 13789, such guidance does not undermine or counter the policy of such Orders or other relevant Executive Orders.

6. The guidance promotes sound tax administration by making no distinction for distributions received from qualified plans during 2020 prior to enactment of the CARES Act.

7. The guidance can be administered on a uniform basis as has been the experience with Notice 2009-82.

8. The CARES Act amendments were drafted similarly to the WRERA amendments. Since Notice 2009-82 was drafted to meet similar concerns, such Notice would be consistent with past Service practice.

Thank you for your time and consideration.

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