This document contains corrections to final regulations (T.D. 9340, 2007-2 C.B. 487) that were published in the Federal Register on Thursday, July 26, 2007 (72 FR 41128) providing updated guidance on section 403(b) contracts of public schools and tax-exempt organizations described in section 501(c)(3). These regulations will affect sponsors of section 403(b) contracts, administrators, participants, and beneficiaries.
Concerning the regulations, John Tolleris at (202) 622-6060; concerning the regulations as applied to church-related entities, Sherri Edelman or Jason Levine at (202) 283-9634 (not toll-free numbers).
The final regulations that are the subject of this correction are under section 403(b) of the Internal Revenue Code.
As published, final regulations (T.D. 9340) contain errors that may prove to be misleading and are in need of clarification.
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Accordingly, 26 CFR part 1 is corrected by the making following correcting amendments:
Paragraph 1. The authority citation for part 1 continues to read in part as follows:
Authority: 26 U.S.C. 7805 * * *
Par. 2. Section 1.403(b)-4 is amended by revising the third and fourth sentences of paragraph (c)(5) Example 12.(i) to read as follows:
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(c) * * *
(5) * * *
Example 12. (i) * * * However, the $5,000 age 50 catch-up amount deferred in 2006 is disregarded for purposes of applying the limitation at paragraph (c)(3)(i)(C) of this section to determine the special section 403(b) catch-up amount. Thus, for 2007, only $80,000 of section 403(b) elective deferrals are taken into account in applying the limitation at paragraph (c)(3)(i)(C) of this section. * * *
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Par. 3. Section 1.403(b)-6 is amended by revising the last sentence of paragraph (e)(5) to read as follows:
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(e) * * *
(5) * * * See also §1.403(b)-9(a)(5) for additional rules relating to annuities payable from a retirement income account.
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Par. 4. Section 1.403(b)-7 is amended by revising the fourth sentence of paragraph (b)(1) to read as follows:
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(b) * * *
(1) * * * Thus, to the extent that a portion of a distribution (including a distribution from a designated Roth account) would be excluded from gross income if it were not rolled over, if that portion of the distribution is to be rolled over into an eligible retirement plan that is not an IRA, the rollover must be accomplished through a direct rollover of the entire distribution to a plan qualified under section 401(a) or a section 403(b) plan and that plan must agree to separately account for the amount not includible in income (so that a 60-day rollover to a plan qualified under section 401(a) or another section 403(b) plan is not available for this portion of the distribution). * * *
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Par. 5. Section 1.403(b)-10 is amended by revising the heading of paragraph (b)(3) and adding a heading to paragraph (b)(3)(i) to read as follows:
(b)(3)(i) to read as follows:
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(b) * * *
(3) Requirements for plan-to-plan transfers—(i) In general. * * *
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LaNita Van Dyke,The Internal Revenue Bulletin is produced and published by the Internal Revenue Service and contains IRS pronouncements affecting tax analysis under the Code and the Regulations, including but not limited to Revenue Procedures, Revenue Rulings, Notices and Announcements. Access the IRS site at https://www.irs.gov/help/irsgov-accessibility for information concerning accessibility of IRS materials. While every effort has been made to ensure that the IRB database files available through the TouchTax application are accurate, those using TouchTax for legal research should verify their results against the printed versions of the IRBs available from the IRS.