For Tax Professionals  
REG-101363-98 September 24, 1998

Section 411(d)(6) Protected Benefits (Taxpayer Relief
Act of 1997); Qualified Retirement Plan Benefits

DEPARTMENT OF THE TREASURY
Internal Revenue Service 26 CFR Part 1 [REG-101363-98] RIN 1545-AV94

TITLE: Section 411(d)(6) Protected Benefits (Taxpayer Relief Act of
1997); Qualified Retirement Plan Benefits

AGENCY: Internal Revenue Service (IRS), Treasury.

ACTION: Notice of proposed rulemaking by cross-reference to
temporary regulations.

SUMMARY: In the Rules and Regulations section of this issue of the
Federal Register, the IRS is issuing temporary regulations providing
for changes to the rules regarding qualified retirement plan
benefits that are protected from reduction by plan amendment, that
have been made necessary by the Taxpayer Relief Act of 1997. The
text of those temporary regulations also serves as the text of these
proposed regulations.

DATES: Written comments and requests for a public hearing must be
received by December 3, 1998.

ADDRESSES: Send submissions to: CC:DOM:CORP:R (REG-101363-98), room
5228, Internal Revenue Service, POB 7604, Ben Franklin Station,
Washington, DC 20044. Submissions may be hand delivered between the
hours of 8 a.m. and 5 p.m. to:

CC:DOM:CORP:R (REG-101363-98), Courier's Desk, Internal Revenue
Service, 1111 Constitution Avenue NW., Washington, DC.
Alternatively, taxpayers may submit.2 comments electronically via
the internet by selecting the "Tax Regs" option on the IRS Home
Page, or by submitting comments directly to the IRS internet site at
http://www.irs/ustreas.gov/prod/tax_regs/comments.html.

FOR FURTHER INFORMATION CONTACT: Concerning the regulations, Linda
S. F.

Marshall, (202) 622-6030 (not a toll-free call); concerning
submissions, Michael Slaughter, (202) 622-7190 (not a toll-free
call).

SUPPLEMENTARY INFORMATION:

Background

Temporary regulations in the Rules and Regulations section of this
issue of the Federal Register amend the Income Tax Regulations (26
CFR part 1) relating to section 411(d)(6), to provide for changes
that have been made necessary by the Taxpayer Relief Act of 1997
(TRA '97), Public Law 105-34, 111 Stat. 788 (1997). The temporary
regulations change the existing regulations to conform with the TRA
'97 rules regarding in-kind distribution requirements for certain
employee stock ownership plans, and specify the time period during
which certain plan amendments for which relief has been granted by
TRA '97 may be made without violating the prohibition against plan
amendments that reduce accrued benefits.

The text of those temporary regulations also serves as the text of
these proposed regulations. The preamble to the temporary
regulations explains the temporary regulations.

Special Analyses

It has been determined that this notice of proposed rulemaking is
not a significant regulatory action as defined in EO 12866.
Therefore, a regulatory assessment is not required. It also has been
determined that section 553(b) of the Administrative Procedure Act
(5 U.S.C. chapter 5) does not apply to these regulations, and
because the regulation does not impose a collection of information
on small entities, the Regulatory Flexibility Act (5 U.S.C. chapter
6) does not apply. Pursuant to section 7805(f) of the Internal
Revenue Code, this notice of proposed rulemaking will be submitted
to the Chief Counsel for Advocacy of the Small Business
Administration for comment on its impact on small business.

Comments and Requests for a Public Hearing Before these proposed
regulations are adopted as final regulations, consideration will be
given to any written comments (a signed original and eight (8)
copies) that are submitted timely to the IRS. All comments will be
available for public inspection and copying. A public hearing may be
scheduled if requested in writing by any person that timely submits
written comments. If a public hearing is scheduled, notice of the
date, time, and place for the hearing will be published in the
Federal Register.

Drafting Information

The principal author of these regulations is Linda S. F. Marshall,
Office of the Associate Chief Counsel (Employee Benefits and Exempt
Organizations. However, other personnel from the IRS and Treasury
Department participated in their development.

List of Subjects in 26 CFR Part 1 Income taxes, Reporting and
recordkeeping requirements.

Proposed Amendments to the Regulations Accordingly, 26 CFR part 1 is
proposed to be amended as follows:

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 * * * Par. 2. Section 1.411(d)-4 is
amended by:

1. Revising paragraph (d)(1)(ii) of Q&A-2.

2. Adding Q&A-11.

The addition and revisions read as follows:

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

* * * * *

Q&A-2 * * *

(d)(1)(ii) [The text of proposed paragraph (d)(1)(ii) of Q&A-2 is
the same as the text of 1.411(d)-4T Q&A-2(d)(1)(ii) published
elsewhere in this issue of the Federal Register.]

* * * * *

Q&A-11 [The text of proposed Q&A-11 is the same as the text of
1.411(d)-4T Q&A-11 published elsewhere in this issue of the Federal
Register.]

Michael P. Dolan
Deputy Commissioner of Internal Revenue


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