In Notice 2009-84; 2009-44 IRB 1 (16 Oct 2009), the IRS provided a measure of reassurance for executors who file protective claims.

Under the final regulations for deductions under Sec. 2053, the estate generally is not entitled to a deduction until the claim has been paid. Because there may be uncertain or contingent claims against an estate, in order to close the estate and make distribution of assets to beneficiaries executors will now be required to file protective claims for potential future refunds. If the estate is later subject to actual payment on a claim, then the appropriate recalculation and refund can be granted by the IRS.

However, commentators observed that the uncertainty of this process could lead to greatly extended periods of time for holding estates open. It was particularly a concern that when the IRS recalculated the refund, it might then wish to reopen the balance of the estate and examine the entire return.

In Notice 2009-84, the IRS indicated that it "generally will refrain" from examining the entire estate. Rather, it will limit the examination to the evidence relating to the deduction for the cash payment on a claim. If the cash payment for the claim is allowable, the IRS will then recompute the estate tax and allow the deduction.

This ruling applies only to estates where a timely protective refund claim was filed and the normal period of limitation on assessments has expired. It also will not apply if there is fraud, malfeasance, collusion, concealment or misrepresentation of a material fact.

In the Worker, Retiree, and Employer Recovery Act of 2008 (WRERA), a "holiday" for 2009 was passed with respect to the required minimum distribution (RMD) for IRAs and other qualified plans. For the year 2009, plan participants and IRA owners are not be required to take a distribution.

Because many plans include in the plan document a requirement for workers to take their RMD, amendments are required for the RMD holiday. Notice 2009-82; 2009-41 IRB 1 (24 Sep 2009) includes two sample plan amendments that may be used to recognize the 2009 RMD holiday.

In addition, there are specific provisions for rollovers and for various plan distributions. Individuals who have received a 2009 RMD generally are permitted until November 30, 2009, or 60 days after the date of distribution, to elect a 2009 rollover option.

The Worker, Retiree and Employer Recovery Act of 2008 waived required minimum distributions (RMDs) for 2009 for most plans. The waivers apply to Sec. 401(k) plans, Sec. 403(b) plans, certain Sec. 457(b) plans, and individual retirement accounts (IRAs).

In Notice 2009-9; 2009-5 IRB 1 (9 Jan 2009), Treasury has explained the specific procedures for the RMD waiver for 2009.

Individuals who are 70½ in 2008 have until April 1, 2009 to take their first withdrawal. Because this is a 2008 withdrawal, it still must be taken prior to April 1, 2009. Individuals who become 70½ in 2009 will not be required to take their RMD for that year. However, they will be required to commence RMDs by the end of 2010.

Some individuals are a beneficiary of an IRA and are taking distributions over a five year fixed term. The waiver of the 2009 distribution will enable these individuals to withdraw the IRA funds over a six year period.

Organizations serving as custodians must notify owners that there will be no 2009 RMD distribution. They may either issue Form 5498 for 2008 with no check in box 11, or notify IRA owners by March 31, 2009 that there is no RMD for this year.

Editor's Note: The Notice emphasizes that the RMDs are waived for 2009, but are applicable for both year 2008 and year 2010. While there is no RMD for year 2009, it still is permissible for a donor to make a qualified charitable distribution (QCD) of up to $100,000 during year 2009. Donors with charitable intent may still choose to make IRA charitable rollover gifts during 2009.