On June 24, the Internal Revenue Service (“IRS”) issued Notice 2021‐40 extending the temporary relief provided in Notice 2021-3, set to expire on June 30, 2021, from the requirement for participant elections to be witnessed in the “physical presence” of a plan representative or notary public, including spousal consents. This 12-month extension of the Notice—through June 30, 2022—is in response to continued challenges due to the COVID‐19 pandemic. Notably, the IRS expressly seeks comments regarding whether to make this relief permanent. A summary of the relief, along with the focus of the requested comments, is set forth below, followed by action steps plan sponsors should consider (although the relief is optional so no action is mandated).

In this TAXES – The Tax Magazine article, Groom’s Elizabeth Dold and David Levine discuss important IRS relief modifying physical presence requirements as related to participant elections. Plan sponsors and recordkeepers may rely on remote electronic notarization through June 2022 and can submit comments by September 30, 2021 on whether permanent guidance should be issued.


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