EMPLOYEE PLANS

T.D. 9220, page 596. REG–122857–05, page 609. Temporary and proposed regulations under section 408A of the Code provide guidance concerning the tax consequences of converting a non-Roth IRA annuity to a Roth IRA. The regulations affect individuals establishing Roth IRAs, beneficiaries under Roth IRAs, and trustees, custodians and issuers of Roth IRAs.

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T.D. 9223, page 591. Final regulations under section 402 of the Code address the amount includible in a distributee’s income when life insurance contracts are distributed by a qualified retirement plan and also address the treatment of property sold by a qualified retirement plan to a plan participant or beneficiary for less than fair market value. The regulations also provide guidance regarding the amounts includible in income when an employee is provided permanent benefits in combination with group-term life insurance or when a life insurance contract is transferred in connection with the performance of services.

REG–133578–05, page 610. Proposed regulations under section 162(k) of the Code provide guidance concerning which corporation is entitled to the deduction for applicable dividends under section 404(k) and also clarify that a payment in redemption of employer securities held by an ESOP is not deductible.

Notice 2005–60, page 606. Minimum funding standards; disaster relief. The Internal Revenue Service, the Employee Benefits Security Administration of the Department of Labor, and the Pension Benefit Guaranty Corporation are providing relief in connection with certain employee benefit plans because of damage in Louisiana, Mississippi, and Alabama caused by Hurricane Katrina. The relief provided by this notice is in addition to the relief already provided by the Service to victims of Hurricane Katrina.