99-18394. Employee Stock Ownership Plans; Section 411(d)(6) Protected Benefits (Taxpayer Relief Act of 1997); Qualified Retirement Plan Benefits; Correction

[Federal Register Volume 64, Number 138 (Tuesday, July 20, 1999)]
[Rules and Regulations]
[Pages 38825-38826]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-18394]


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DEPARTMENT OF THE TREASURY

Internal Revenue Service

26 CFR Part 1

[TD 8806]
RIN 1545-AV94


Employee Stock Ownership Plans; Section 411(d)(6) Protected 
Benefits (Taxpayer Relief Act of 1997); Qualified Retirement Plan 
Benefits; Correction

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Correcting amendment.

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SUMMARY: This document contains corrections to final regulations which 
were published in the Federal Register on Friday, January 8, 1999, (64 
FR 1125), relating to employee stock ownership plans and protected 
benefits under section 411(d)(6) and qualified retirement plan 
benefits.

DATES: This correction is effective January 8, 1999.

FOR FURTHER INFORMATION CONTACT: Linda S. F. Marshall, [phone] 
(not a toll-free number).

SUPPLEMENTARY INFORMATION:

Background

    The final regulations that are subject to this correction are under 
section 411 of the Internal Revenue Code.

Need for Correction

    On January 8, 1999, final regulations (TD 8806) were published in 
the Federal Register at 64 FR 1125. These regulations inadvertently 
amended Sec. 1.411(d)-4 Q&A-2(d)(2)(ii) instead of Sec. 1.411(d)-4 Q&A-
2(d)(1)(ii). This document is correcting this amendment by providing 
the correct language for Sec. 1.411(d)-4 Q&A-2(d)(1)(ii) and restoring 
the language for Sec. 1.411(d)-4 Q&A-2(d)(2)(ii).

List of Subjects in 26 CFR Part 1

    Income taxes, Reporting and recordkeeping requirements.

[[Page 38826]]

Correction of Publication

    Accordingly, 26 CFR Part 1 is corrected by making the following 
correcting amendments:

PART 1--INCOME TAXES

    Paragraph 1. The authority citation for part 1 continues to read in 
part as follows:

    Authority: 26 U.S.C. 7805 * * *


Sec. 1.411(d)-4  [Corrected]

    Par. 2. Section 1.411(d)-4 Q&A-2 is amended by:
    1. Removing paragraph (d)(1)(ii).
    2. Redesignating paragraph (d)(2)(ii) as paragraph (d)(1)(ii).
    3. Adding paragraph (d)(2)(ii).
    The addition reads as follows:


Sec. 1.411(d)-4  Section 411(d)(6) protected benefits.

* * * * *
    Q-2: * * *
    A-2: * * *
    (d) * * *
    (2) * * *
    (ii) ESOP investment requirement. Except as provided in paragraph 
(d)(2)(iii) of this Q&A-2, benefits provided by employee stock 
ownership plans will not be eligible for the exceptions in paragraph 
(d)(1) of this Q&A-2 unless the benefits have been held in a tax credit 
employee stock ownership plan (as defined in section 409 (a)) or an 
employee stock ownership plan (as defined in section 4975 (e)(7)) 
subject to section 409 (h) for the five-year period prior to the 
exercise of employer discretion or any amendment affecting such 
benefits and permitted under paragraph (d)(1) of this Q&A-2. For 
purposes of the preceding sentence, if benefits held under an employee 
stock ownership plan are transferred to a plan that is an employee 
stock ownership plan at the time of transfer, then the consecutive 
periods under the transferor and transferee employee stock ownership 
plans may be aggregated for purposes of meeting the five-year 
requirement. If the benefits are held in an employee stock ownership 
plan throughout the entire period of their existence, and such total 
period of existence is less than five years, then such lesser period 
may be substituted for the five year requirement.
* * * * *
Cynthia E. Grigsby,
Chief, Regulations Unit, Assistant Chief Counsel (Corporate).
[FR Doc. 99-18394 Filed 7-19-99; 8:45 am]
BILLING CODE 4830-01-P