By Barry Salkin
Longstanding Internal Revenue Service (“IRS”) regulations with respect to spousal consent to a waiver of benefits require an election to be witnessed in the physical presence of a notary public or plan representative. Due to the coronavirus pandemic, however, those rules were temporarily suspended beginning January 1, 2020, with the latest expiration date scheduled to have been December 31, 2022. On December 27, 2022, the IRS issued proposed regulations permitting remote witnessing, in the presence of either a notary public or plan administrator, as an acceptable alternative to the physical presence requirement if certain conditions are satisfied.
Under the proposed regulations, a plan may accept a spousal consent witnessed remotely by a notary public, provided that (i) the signature of the person signing the spousal consent (the “spouse”) is witnessed by the notary public using live audio-video technology, (ii) the remote witnessing is consistent with state law requirements that apply to the notary public, and (iii) the existing five special rules regarding the use of an electronic medium in the current IRS regulations governing participant consent apply to the spousal consent. The requirements for remote witnessing by a plan representative are more extensive. As was the case for remote witnessing by a notary public, the signature of the spouse must be witnessed by a plan representative using live audio-video technology, and the existing five special rules regarding the use of an electronic medium in the current IRS regulations continue to apply. In addition, because plan representatives are not subject to the rules governing state notaries, the following five further requirements apply:
- The spouse must present a valid photo ID to the plan representative during the live audio-video conference;
- The live audio-video conference must allow for direct interaction between the spouse and the plan representative;
- The spouse must transmit a legible copy of the signed document directly to the plan representative by electronic means on the day the spousal consent is signed;
- After receiving the signed spousal consent, the plan representative must acknowledge that the signature has been witnessed by the plan representative and transmit the signed spousal consent, including the acknowledgment, back to the spouse under a system that satisfies the notice requirements under applicable IRS regulations; and
- A recoding of the audio-video conference during which the spousal consent was signed remotely must be made by the plan representative and must be retained by the plan in accordance with Internal Revenue Code rules relating to the maintenance of records.
The regulation would apply beginning six months after publication in the Federal Register; until then taxpayers may rely on the proposed regulations. Consequently, spousal consent elections can continue to be witnessed remotely by either a notary public or plan representative after December 31, 2022, as long as the IRS’s remote witnessing conditions are satisfied.