The IRS has ended uncertainty over the upcoming expiration date of temporary relief of the physical presence requirement for participant elections, providing another extension.
IRS Notice 2021-40, 2021-28 IRB 1, released June 24, provides a 12-month extension of the temporary relief from the physical presence requirement in reg. section 1.401(a)-21(d)(6) for participant elections that must be witnessed by a plan representative or a notary public.
By moving the expiration date to June 30, 2022, the IRS has now twice extended the temporary relief, having previously extended it to June 30, 2021, through Notice 2021-03, 2021-2 IRB 316.
The continued relief, originally established in Notice 2020-42, 2020-26 IRB 986, has been granted in response to the COVID-19 pandemic and the related social distancing precautions. William Evans of the Treasury Office of Benefits Tax Counsel said May 12 that the government had been working to issue the guidance before the current expiration date of June 30.
The notice explains that the IRS and Treasury have received numerous comments requesting permanent relief from the physical presence requirement, as well as requests for additional time to submit further comments.
The IRS said that after comments are reviewed, it will determine whether to propose modifications to the physical presence requirement through the regulatory process or to issue an announcement that the requirement will be retained without modification.
The IRS will accept comments on whether it should issue permanent guidance modifying the physical presence requirement until September 30. The agency requested feedback on several areas, including whether there is evidence that the relief has led to fraud or abuse, how participant elections are being witnessed as the COVID-19 pandemic abates, and what safeguards should be established if guidance permanently modifying the physical presence is issued.