- 1 -
March 6, 1990
TO: PENSION MEMBERS NO. 10-90
RE: IRS INFORMATION LETTER CONCERNING REVENUE PROCEDURE 89-52
__________________________________________________________
Attached is a copy of an IRS information letter obtained by
the Institute concerning Form 5498 reporting upon the death of
the IRA owner. The letter addresses issues arising under Revenue
Procedure 89-52. (See Institute Memorandum to Pension Members
No. 46-89, dated October 11, 1989.) A copy of the Institute's
request also is attached.
The information letter addresses three issues. First, the
Institute requested clarification of the revenue procedure's
application to surviving spouse beneficiaries. The information
letter states that the reporting rules of the revenue procedure
will apply until the surviving spouse takes the IRA as his or her
own. If the spouse makes the IRA his or her own, the account
will be reported in only his or her name and need not identify
the decedent. In the year of death, however, the IRA trustee
must still send a year-end statement and a Form 5498, if
required, to both the beneficiary and the decedent's executor.
Second, Revenue Procedure 89-52 stated that the IRA trustee
need not make a corrective filing of Form 5498 if it is not
notified of the owner's death until after May 31 of the year
following the year of the death. The Institute asked for
clarification of the trustee's reporting responsibilities if the
trustee learns of the death between January 31 (the deadline for
sending the year-end statement) and May 31 (the deadline for
filing Form 5498). In such circumstances, the IRS information
letter states that the trustee must correctly file Form 5498 with
the IRS and give both the decedent and the beneficiary their
correct year-end valuations, either on Form 5498 or on a
corrected year-end statement.
Third, the Institute requested guidance concerning the
revenue procedure's impact on the general Form 5498 reporting
rules. Specifically, the general rules provide that if the
trustee furnished a year-end valuation to the participant by
January 31 and no contributions were made for the year, then the
- 2 -
trustee need not provide a Form 5498 to the participant for that
year. The IRS information letter provides that Revenue Procedure
89-52 is intended to fit within these general requirements.
Therefore, if no contributions were made for the year of death
and the year-end statement has been provided to both the
beneficiary and the executor, then the trustee is not required to
provide a Form 5498 to either the beneficiary or the executor.
We will keep you informed of further developments.
Kathy D. Ireland
Associate General Counsel
Attachments