Bulletin No. 2021–28

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–28

July 12, 2021

These synopses are intended only as aids to the reader in

identifying the subject matter covered. They may not be

relied upon as authoritative interpretations.

EMPLOYEE PLANS

Notice 2021-40, page 15.

This notice is a 12-month extension of the relief provided

in Notice 2020-42, as extended by Notice 2021-3. For the

period from July 1, 2021, through June 30, 2022, this notice extends two types of relief from the physical presence

requirement in § 1.401(a)-21(d)(6)(i) for participant elections

required to be witnessed by a plan representative or a notary

Finding Lists begin on page ii.

public: (1) temporary relief from the physical presence requirement for any participant election witnessed by a notary

public in a state that permits remote notarization (either by

law or through an executive order), and (2) temporary relief

from the physical presence requirement for any participant

election witnessed by a plan representative. This notice also

solicits comments on whether permanent guidance modifying the physical presence requirement in § 1.401(a)(21)-1(d)

(6)(i) should be issued.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce the law with integrity and fairness to all.

Introduction

The Internal Revenue Bulletin is the authoritative instrument

of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service

and for publishing Treasury Decisions, Executive Orders, Tax

Conventions, legislation, court decisions, and other items of

general interest. It is published weekly.

It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application

of the tax laws, including all rulings that supersede, revoke,

modify, or amend any of those previously published in the

Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of

internal practices and procedures that affect the rights and

duties of taxpayers are published.

Revenue rulings represent the conclusions of the Service

on the application of the law to the pivotal facts stated in

the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices,

identifying details and information of a confidential nature are

deleted to prevent unwarranted invasions of privacy and to

comply with statutory requirements.

Rulings and procedures reported in the Bulletin do not have the

force and effect of Treasury Department Regulations, but they

may be used as precedents. Unpublished rulings will not be

relied on, used, or cited as precedents by Service personnel in

the disposition of other cases. In applying published rulings and

procedures, the effect of subsequent legislation, regulations,

court decisions, rulings, and procedures must be considered,

and Service personnel and others concerned are cautioned

against reaching the same conclusions in other cases unless

the facts and circumstances are substantially the same.

The Bulletin is divided into four parts as follows:

Part I.—1986 Code.

This part includes rulings and decisions based on provisions

of the Internal Revenue Code of 1986.

Part II.—Treaties and Tax Legislation.

This part is divided into two subparts as follows: Subpart A,

Tax Conventions and Other Related Items, and Subpart B,

Legislation and Related Committee Reports.

Part III.—Administrative, Procedural, and Miscellaneous.

To the extent practicable, pertinent cross references to these

subjects are contained in the other Parts and Subparts. Also

included in this part are Bank Secrecy Act Administrative

Rulings. Bank Secrecy Act Administrative Rulings are issued

by the Department of the Treasury’s Office of the Assistant

Secretary (Enforcement).

Part IV.—Items of General Interest.

This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements.

The last Bulletin for each month includes a cumulative index

for the matters published during the preceding months. These

monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate.

July 12, 2021 

Bulletin No. 2021–28

Part III

Extension of Temporary

Relief from the Physical

Presence Requirement

Notice 2021-40

I. PURPOSE

This notice provides a 12-month extension, through June 30, 2022, of the temporary relief provided in Notice 2021-3,

2021-2 IRB 316, from the physical presence requirement in § 1.401(a)-21(d)(6)

for participant elections required to be

witnessed by a plan representative or a

notary public (the physical presence requirement). This notice also requests specific comments, by September 30, 2021,

regarding the physical presence requirement. This extension of relief is provided

to respond to the continuing Coronavirus

Disease 2019 (COVID-19) pandemic and

to permit consideration of stakeholder

comments provided pursuant to this notice

and Notice 2021-3.

II. BACKGROUND

On March 13, 2020, the President determined that the COVID-19 pandemic

was of sufficient severity and magnitude

to warrant an emergency determination

under the Robert T. Stafford Disaster

Relief and Emergency Assistance Act,

42 U.S.C. 5121- 5207. In response to the

public health emergency caused by the

COVID-19 pandemic and related social

distancing precautions, Notice 2020-42,

2020-26 IRB 986, provided temporary

relief through December 31, 2020, from

the physical presence requirement for any

participant election witnessed by a notary public of a state that permits remote

electronic notarization or by a plan representative, if certain requirements were

satisfied. Notice 2021-3 (1) extended this

temporary relief through June 30, 2021,

(2) noted that, during this temporary relief period, a participant is still able to

have a participant election witnessed in

the physical presence of a notary public and have that participant election be

Bulletin No. 2021–28

accepted by a plan in accordance with

§ 1.401(a)-21(d)(6)(i), (3) solicited comments on whether relief from the physical presence requirement should be made

permanent and, if made permanent, what,

if any, procedural safeguards are necessary in order to reduce the risk of fraud,

spousal coercion, or other abuse in the

absence of a physical presence requirement, and (4) stated that any permanent

modification of the physical presence

requirement would be made through the

regulatory process, thus providing an additional opportunity for stakeholders to

provide comments.

The Department of the Treasury

(Treasury Department) and the Internal

Revenue Service (IRS) received several

comments from stakeholders requesting

permanent relief from the physical presence requirement. In addition, some stakeholders asked for additional time to submit comments about whether the physical

presence requirement should be modified

in light of concerns regarding potential

fraud, spousal coercion, or other abuse.

III. EXTENSION OF RELIEF

This notice extends, for the 12-month

period from July 1, 2021, through June

30, 2022, the temporary relief provided in

Notice 2021-3, including extension of all

the requirements to qualify for that relief.

Accordingly, for that 12-month period, a

plan may qualify for relief from the physical presence requirement for any participant election witnessed by a notary public

or a plan representative using an electronic system that satisfies the applicable requirements specified in section III.A and

B of Notice 2021-3.

IV. REQUEST FOR COMMENTS

The Treasury Department and the IRS

request comments on whether permanent

guidance modifying the physical presence

requirement should be issued. After review and consideration of the comments

received in response to this notice and Notice 2021-3, the Treasury Department and

the IRS will determine whether to propose

modifications to the physical presence re-

15

quirement in § 1.401(a)-(21)(d)(6) as part

of the regulatory process that will include

the opportunity for further comment, or

instead to issue an announcement that the

physical presence requirement currently

in § 1.401(a)-(21)(d)(6) will be retained

without modification.

Specifically, the Treasury Department

and the IRS request comments regarding: (1) how the temporary removal of the

physical presence requirement for participant elections required to be witnessed

by a plan representative or a notary public

has affected costs and burdens for all parties (for example, participants, spouses,

and plans) and whether there are costs and

burdens associated with the physical presence requirement that support modifying

the requirement on a permanent basis; (2)

whether there is evidence that the temporary removal of the physical presence

requirement has resulted in fraud, spousal

coercion, or other abuse, and how, if the

physical presence requirement is permanently modified, increased fraud, spousal

coercion, or other abuse may be likely

to result from that modification; (3) how

participant elections are being witnessed,

or are expected to be witnessed, as the

COVID-19 pandemic abates (for example, whether the availability of in-person

notarization has returned, or is expected

to return, to pre-COVID-19 pandemic

levels); (4) if guidance permanently modifying the physical presence requirement

is issued, what procedures should be established to provide the same safeguards

for participant elections as are provided

through the physical presence requirement; and (5) if guidance permanently

modifying the physical presence requirement is issued, whether the guidance

should establish procedures for witnessing

by plan representatives that are different

from procedures for witnessing by notaries.

Comments should be submitted in writing by September 30, 2021, and should

include a reference to Notice 2021-40.

Comments may be submitted electronically via the Federal eRulemaking Portal at

www.regulations.gov (type IRS-2021-40

in the search field on the regulations.gov

homepage to find this notice and submit

July 12, 2021

comments). Alternatively, comments may

be mailed to: Internal Revenue Service,

Attn: CC:PA:LPD:PR (Notice 2021-40),

Room 5203, P.O. Box 7604, Ben Franklin Station, Washington D.C.20044. All

commenters are strongly encouraged to

submit public comments electronically.

The IRS expects to have limited personnel

available to process public comments that

are submitted on paper through mail. Until further notice, any comments submitted

July 12, 2021

on paper will be considered to the extent

practicable. The Treasury Department and

the IRS will publish for public availability any comment submitted electronically,

and to the extent practicable on paper, to

its public docket.

V. EFFECT ON OTHER

DOCUMENTS

Notice 2021-3 is modified.

16

Vi. DRAFTING INFORMATION

The principal authors of this notice are

Arslan Malik and Pamela R. Kinard of

the Office of the Associate Chief Counsel (Employee Benefits, Exempt Organizations, and Employment Taxes). For

further information regarding this notice,

contact Arslan Malik at (202) 317-6700 or

Pamela R. Kinard at (202) 317-6000 (not

toll-free numbers).

Bulletin No. 2021–28

Definition of Terms

Revenue rulings and revenue procedures

(hereinafter referred to as “rulings”) that

have an effect on previous rulings use the

following defined terms to describe the

­effect:

Amplified describes a situation where

no change is being made in a prior published position, but the prior position is

being extended to apply to a variation of

the fact situation set forth therein. Thus, if

an earlier ruling held that a principle applied to A, and the new ruling holds that

the same principle also applies to B, the

earlier ruling is amplified. (Compare with

modified, below).

Clarified is used in those instances

where the language in a prior ruling is being made clear because the language has

caused, or may cause, some confusion. It

is not used where a position in a prior ruling is being changed.

Distinguished describes a situation

where a ruling mentions a previously published ruling and points out an essential

difference between them.

Modified is used where the substance

of a previously published position is being

changed. Thus, if a prior ruling held that a

principle applied to A but not to B, and the

new ruling holds that it applies to both A

and B, the prior ruling is modified because

it corrects a published position. (Compare

with amplified and clarified, above).

Obsoleted describes a previously published ruling that is not considered determinative with respect to future transactions.

This term is most commonly used in a ruling

that lists previously published rulings that

are obsoleted because of changes in laws or

regulations. A ruling may also be obsoleted

because the substance has been included in

regulations subsequently adopted.

Revoked describes situations where the

position in the previously published ruling

is not correct and the correct position is

being stated in a new ruling.

Superseded describes a situation where

the new ruling does nothing more than

restate the substance and situation of a

previously published ruling (or rulings).

Thus, the term is used to republish under

the 1986 Code and regulations the same

position published under the 1939 Code

and regulations. The term is also used

when it is desired to republish in a single

ruling a series of situations, names, etc.,

that were previously published over a

period of time in separate rulings. If the

new ruling does more than restate the substance of a prior ruling, a combination of

terms is used. For example, modified and

superseded describes a situation where the

substance of a previously published ruling

is being changed in part and is continued

without change in part and it is desired to

restate the valid portion of the previously published ruling in a new ruling that is

self contained. In this case, the previously

published ruling is first modified and then,

as modified, is superseded.

Supplemented is used in situations in

which a list, such as a list of the names of

countries, is published in a ruling and that

list is expanded by adding further names

in subsequent rulings. After the original

ruling has been supplemented several

times, a new ruling may be published that

includes the list in the original ruling and

the additions, and supersedes all prior rulings in the series.

Suspended is used in rare situations to

show that the previous published rulings

will not be applied pending some future

action such as the issuance of new or

amended regulations, the outcome of cases in litigation, or the outcome of a Service study.

Abbreviations

The following abbreviations in current use

and formerly used will appear in material

published in the Bulletin.

A—Individual.

Acq.—Acquiescence.

B—Individual.

BE—Beneficiary.

BK—Bank.

B.T.A.—Board of Tax Appeals.

C—Individual.

C.B.—Cumulative Bulletin.

CFR—Code of Federal Regulations.

CI—City.

COOP—Cooperative.

Ct.D.—Court Decision.

CY—County.

D—Decedent.

DC—Dummy Corporation.

DE—Donee.

Del. Order—Delegation Order.

DISC—Domestic International Sales Corporation.

DR—Donor.

E—Estate.

EE—Employee.

E.O.—Executive Order.

ER—Employer.

Bulletin No. 2021–28

ERISA—Employee Retirement Income Security Act.

EX—Executor.

F—Fiduciary.

FC—Foreign Country.

FICA—Federal Insurance Contributions Act.

FISC—Foreign International Sales Company.

FPH—Foreign Personal Holding Company.

F.R.—Federal Register.

FUTA—Federal Unemployment Tax Act.

FX—Foreign corporation.

G.C.M.—Chief Counsel’s Memorandum.

GE—Grantee.

GP—General Partner.

GR—Grantor.

IC—Insurance Company.

I.R.B.—Internal Revenue Bulletin.

LE—Lessee.

LP—Limited Partner.

LR—Lessor.

M—Minor.

Nonacq.—Nonacquiescence.

O—Organization.

P—Parent Corporation.

PHC—Personal Holding Company.

PO—Possession of the U.S.

PR—Partner.

PRS—Partnership.

i

PTE—Prohibited Transaction Exemption.

Pub. L.—Public Law.

REIT—Real Estate Investment Trust.

Rev. Proc.—Revenue Procedure.

Rev. Rul.—Revenue Ruling.

S—Subsidiary.

S.P.R.—Statement of Procedural Rules.

Stat.—Statutes at Large.

T—Target Corporation.

T.C.—Tax Court.

T.D.—Treasury Decision.

TFE—Transferee.

TFR—Transferor.

T.I.R.—Technical Information Release.

TP—Taxpayer.

TR—Trust.

TT—Trustee.

U.S.C.—United States Code.

X—Corporation.

Y—Corporation.

Z—Corporation.

July 12, 2021

Numerical Finding List1

Bulletin 2021–28

Notices:

2021-39, 2021-27 I.R.B. 3

2021-40, 2021-28 I.R.B. 15

Revenue Procedures:

2021-28, 2021-27 I.R.B. 5

2021-29, 2021-27 I.R.B. 12

Revenue Rulings:

2021-12, 2021-27 I.R.B. 1

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

1

July 12, 2021

ii

Bulletin No. 2021–28

Finding List of Current Actions on

Previously Published Items1

Bulletin 2021–28

A cumulative list of all revenue rulings, revenue procedures, Treasury decisions, etc., published in Internal Revenue Bulletins 2021–27 through 2021–52 is in Internal Revenue Bulletin

2021–52, dated December 27, 2021.

1

Bulletin No. 2021–28

iii

July 12, 2021

Internal Revenue Service

Washington, DC 20224

Official Business

Penalty for Private Use, $300

INTERNAL REVENUE BULLETIN

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