Part III. Administrative, Procedural, and Miscellaneous

Required Minimum Distributions for 2009

Notice 2009–9

PURPOSE

This notice provides guidance to financial institutions on reporting required minimum distributions for 2009 after enactment of the Worker, Retiree, and Employer Recovery Act of 2008, P. L. 110–458.

BACKGROUND

On December 23, 2008, the President signed the Worker, Retiree, and Employer Recovery Act of 2008 (the Act) into law. Section 201 of the Act waives any required minimum distributions (RMDs) for 2009 from retirement plans that hold each participant’s benefit in an individual account, such as § 401(k) plans and § 403(b) plans, and certain § 457(b) plans. The Act also waives any RMD for 2009 from an Individual Retirement Arrangement (IRA). This means that most participants and beneficiaries otherwise required to take minimum distributions from these types of accounts are not required to withdraw any amount in 2009. If they do make a withdrawal in 2009 (that is not an RMD for 2008), they might be able to roll over the withdrawn amount into other eligible retirement plans. Of course, they must still include any previously untaxed portion of the withdrawal that they do not roll over in their gross income. See Individual Retire- ment Arrangements (IRAs ), Publication 590, and Pension and Annuity Income, Publication 575, for additional information on rollovers and on calculating the taxable portion of a distribution.

The Act does not waive any 2008 RMDs, even for individuals who were eligible and chose to delay taking their 2008 RMD until April 1, 2009 ( e.g., retired employees and IRA owners who turned 70 ¹ /2 in 2008). These individuals must still take their full 2008 RMD by April 1, 2009. The 2009 RMD waiver under the Act does apply to individuals who may be eligible to postpone taking their 2009 RMD until

April 1, 2010 (generally, retired employees and IRA owners who attain age 70 ¹ /2 in 2009). However, the Act does not waive any RMDs for 2010.

If a beneficiary is receiving distributions over a 5-year period, he or she can now waive the distribution for 2009, effectively taking distributions over a 6-year rather than a 5-year period.

IRA REPORTING

Issuers of the 2008 Form 5498, IRA Contribution Information, should not put a check in Box 11. However, in recognition of the short amount of time to make programming changes, if a financial institution issues a 2008 Form 5498 with a check in Box 11, the IRS will not consider such form issued incorrectly solely because of the check in Box 11, provided the IRA owner is notified by the financial institution no later than March 31, 2009, that no RMD is required for 2009.

In addition, the RMD information required under Notice 2002–27, 2002–1 C.B. 814, need not be sent to IRA owners for 2009. If a financial institution sends a separate RMD statement to an IRA owner, either initially or in response to the owner’s request for the financial institution to calculate the RMD for 2009, the financial institution must show the RMD for 2009 as zero (0). Alternatively, the financial institution may send the IRA owner a statement showing the RMD that would have been required but for the waiver of RMDs for 2009, along with an explanation of the waiver for 2009.

The IRS encourages all financial institutions to inform IRA owners who delayed taking their 2008 RMD until April 1, 2009, that they are still required to take that distribution.

EFFECT ON OTHER DOCUMENTS

Notice 2002–27 is modified.

DRAFTING INFORMATION

The principal author of this notice is Anita Bower of the Employee Plans, Tax Exempt and Government

Entities Division. Questions regarding this notice may be sent via e-mail to RetirementPlanQuestions@irs.gov .

Treatment of Certain Obligations Under Section 956(c)

Notice 2009–10

1. On October 27, 2008, the Treasury Department and the Internal Revenue Service (Service) published Notice 2008–91. See Notice 2008–91, 2008–43 I.R.B. 1001. This notice provides that the regulations described in Notice 2008–91 will apply (in addition to the period described in Notice 2008–91) to the third consecutive taxable year of a foreign corporation, if any, (including any short taxable year) that ends after October 3, 2008, and that ends on or before December 31, 2009.

2. On May 27, 2008, the Treasury Department and the Service published Rev. Proc. 2008–26, 2008–21 I.R.B. 1014, which applies to determine whether securities are “readily marketable” for purposes of section 956(c)(2)(J) for any day during calendar years 2007 or 2008, for which it is relevant whether securities are readily marketable for purposes of that section. This notice extends the application of Rev. Proc. 2008–26 to any day during calendar year 2009, for which it is relevant whether securities are readily marketable for purposes of section 956(c)(2)(J) (in addition to any day during calendar years 2007 or 2008).

DRAFTING INFORMATION

The principal author of this notice is Ethan A. Atticks of the Office of Associate Chief Counsel (International). For further information regarding this notice, contact Mr. Atticks at (202) 622–3840 (not a tollfree call).

February 2, 2009 419 2009–5 I.R.B.

Brokers May Furnish Certain Composite Annual Tax Reporting Statements by February 17, 2009, Without Penalty

Notice 2009–11

PURPOSE

This notice provides additional time for furnishing certain composite annual tax reporting statements.

BACKGROUND

Section 403 of the Energy Improvement and Extension Act of 2008, Div. B of Pub. L. No. 110–343, 122 Stat. 3765 (the Act), enacted on October 3, 2008, amended section 6045(b) of the Internal Revenue Code to change from January 31 to February 15 the deadline for furnishing to customers the information statements required by section 6045, including Form 1099–B (Proceeds From Broker and Barter Exchange Transac- tions), effective for statements required to be furnished after December 31, 2008. Because February 15, 2009, is a Sunday, and because February 16, 2009, is a legal holiday, the deadline under section 6045(b) with respect to reportable items from calendar year 2008 is February 17, 2009, pursuant to section 7503. The Act also added language to section 6045(b) to permit reporting entities to furnish other

items that they must report to customers in January by the extended deadline when these other items are furnished with a “consolidated reporting statement (as defined in regulations).” There is not yet a regulatory definition of the term “consolidated reporting statement.” Section 6722 imposes a penalty on any reporting entity that fails to furnish any required payee statement by its deadline.

DEADLINE FOR REPORTING ITEMS FROM 2008

This notice applies to reporting entities that furnish Form 1099–B and that customarily report the items furnished on Form 1099–B to customers on an annual composite form recipient statement (as described in Section 4.2 of Rev. Proc. 2008–36, 2008–33 I.R.B. 340). This notice provides that such reporting entities have until February 17, 2009, to report all items that they customarily report on these annual composite form recipient statements to all customers whether or not each customer’s transactional history for 2008 triggered an obligation to furnish Form 1099–B to that particular customer. This notice modifies the 2008 General Instructions for Forms 1099, 1098, 5498, and W–2G and applies only to the reporting of items from calendar year 2008.

EXAMPLE

This notice is illustrated by the following example:

Broker, a brokerage firm, customarily issues an annual composite form recipient statement to each of its customers that reports dividends as required by section 6042(c), interest as required by section 6049(c), and the gross proceeds of the sale of securities and other items as required by section 6045(b). Broker issued correct annual composite form recipient statements to all of its customers on February 12, 2009. Because only 80 percent of Broker’s customers sold securities or other items in 2008, only 80 percent of the annual composite form recipient statements contained information required to be reported under section 6045(b) on Form 1099–B. Because the composite form recipient statements customarily included dividends and interest with items reportable on Form 1099–B, and because Broker provided correct statements to each of its customers by February 17, 2009, the IRS will treat Broker as having met its reporting deadline requirements under sections 6042(c) and 6049(c) for items from calendar year 2008 reported on the annual composite form recipient statements and will not assess any penalties under section 6722 for these items.

DRAFTING INFORMATION

The principal author of this notice is Stephen Schaeffer of the Office of Associate Chief Counsel (Procedure & Administration). For further information regarding this notice, please contact Stephen Schaeffer at (202) 622–4910 (not a toll-free call).

2009–5 I.R.B. 420 February 2, 2009