IRS Proposes Use of Electronic Media to Make Certain Spousal Consents

The Treasury Department and the IRS have proposed a rule that would modify existing participant election rules in two significant ways:

• It provides two alternatives to in-person witnessing of spousal consents by allowing a spousal consent to be witnessed remotely by a notary public or plan representative, but only if certain conditions are satisfied; and
• It clarifies that certain special rules for the use of an electronic medium for participant elections also apply to spousal consents.

The proposed rule would also make other minor conforming changes. The proposed rule generally affects sponsors and administrators of, and individuals entitled to benefits under, certain qualified retirement plans (including 401(k) plans).

Prior Relief

In response to the COVID-19 pandemic, the IRS granted temporary relief from the requirement that a participant election be witnessed in the physical presence of a plan representative or a notary public (the “physical presence requirement”), including spousal consent.

Three additional extensions of this relief were granted in response to the continuing COVID-19 pandemic, for the period of Jan. 1, 2020, through Dec. 31, 2022. The spousal consent provisions of the proposed rule closely resemble this prior relief.

Applicability

Prior to the applicability date of the final regulation, taxpayers may rely on the rules set forth in the proposed rule. Written or electronic comments on the proposal must be received by March 30, 2023.

The proposal allows spousal consent to be witnessed remotely by a notary public or plan representative if certain conditions are satisfied.

IMPORTANT DATES

Dec. 30, 2022 
The proposed rule on the use of electronic media for participant elections and spousal consents was published on this date.

March 30, 2023
Written or electronic comments on the proposal must be received by this date.

April 11, 2023
A telephonic public hearing on the proposal is scheduled for this date. Requests to attend the hearing must be received by April 7, 2023.