IRS Extends Temporary Relief from the Physical Presence Requirement

The IRS on May 13 announced that it is extending to the end of 2022 the temporary relief from the requirement that certain participant elections be witnessed in the physical presence of a plan representative or a notary public. 

In Notice 2022-27 the IRS says that due to the pandemic, it is extending the temporary relief provided in Notice 2021-40 from the requirement in Treas. Reg. §1.401(a)-21(d)(6)(i) that certain participant elections be witnessed in the physical presence of a plan representative or a notary public—the physical presence requirement.

Notice 2021-40 had extended 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. During that 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 Notice 2021-3.

In Notice 2021-40, the IRS also had requested comments on specific matters relating to the relief from the physical presence requirement, including comments on whether to propose modifications to the physical presence requirement. The IRS says that it received comments from “numerous” stakeholders regarding the physical presence requirement. Some argued that the IRS should retain the relief, and some went even further and requested permanent relief.

The Bottom Line

Under Notice 2022-27, the IRS is extending, for the six-month period July 1, 2022-Dec. 31, 2022, the temporary relief from the physical presence requirement provided in Notice 2021-40, including extension of the requirements to qualify for that relief. Thus, during those six months, 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 Notice 2021-03.