Proposed IRS Regulations Would Permanently Allow Remote Spousal Consent Elections

The Internal Revenue Service (IRS) issued a proposed rule on December 27, 2022, that would permanently allow remote witnessing of spousal consent elections under certain circumstances. The proposed rule would go into effect six months after publication in the Federal Register. Taxpayers can continue to make remote spousal consent elections according to the proposed rule until it formally goes into effect.

Historically, IRS regulations required that any spousal consent to a waiver of benefits be executed in the physical presence of a notary public or a plan representative. The IRS suspended those regulations due to the COVID-19 pandemic as of January 1, 2020. Due to the ongoing pandemic, the IRS periodically extended the suspension, with the most recent extension being due to expire on December 31, 2022.

The proposed rule permits remote witnessing of spousal consent elections by a notary public, as long as the execution meets the following requirements:

  • A notary public witnesses the person signing the spousal consent using live audio-video technology;
  • The remote witnessing complies with all state law requirements concerning the notary public; and
  • The spousal consent meets the existing five special rules for using an electronic medium in the current IRS regulations governing participant consent.

The requirements for remote witnessing of spousal consent elections by a plan representative under the proposed rule are more extensive. As with remote witnessing by a notary public, the plan representative must witness the person signing the spousal consent using live audio-video technology. The spousal consent also must meet the existing five special rules for using an electronic medium in current IRS regulations governing participant consent. In addition, because plan representatives are not subject to state laws like notaries public, one must follow the additional five requirements:

  • The person signing the spousal consent must present a valid photo ID to the plan representative during the live audio-video conference;
  • The live audio-video conference must allow direct interaction between the person signing the spousal consent and the plan representative;
  • The person signing the spousal consent must transmit a legible copy of the signed document directly to the plan representative by electronic means on the same day that they sign the spousal consent;
  • After the plan representative receives the signed spousal consent, they must acknowledge that they witnessed the signature and transmit the signed spousal consent, including the acknowledgment, back to the person signing the spousal consent under a system that satisfies the notice requirements of applicable IRS regulations; and
  • The plan representative must make and retain a recording of the audio-video conference during which the person remotely signed the spousal consent according to Internal Revenue Code rules relating to maintaining records.

HBL has experience in all areas of benefits and employment law, offering a comprehensive solution to all your business benefits and HR/employment needs. We help ensure you are in compliance with the complex requirements of ERISA and the IRS code, as well as those laws that impact you and your employees. Together, we reduce your exposure to potential legal or financial penalties. Learn more by calling 470-571-1007.

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Hall Benefits Law, LLC

HBL offers employers comprehensive legal guidance on benefits in mergers and acquisitions, Employee Stock Ownership Plans (ESOPs), executive compensation, health and welfare benefits, healthcare reform, and retirement plans. We counsel a wide spectrum of clients including small, mid-sized, and large companies, 401(k) investment advisors, health insurance brokers, accountants, attorneys, and HR consultants, just to name a few. HBL is passionate about advising clients, and we are dedicated to our mission: to provide comprehensive, personalized, and practical ERISA and benefits legal solutions that exceed client expectations.

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