IRS Announcement Provides Temporary Relief to IRA Owners; DOL Considering Additional Relief: IRS Announcement Forestalls Disqualification of Many IRAs, Pending Further DOL Consideration of Additional Relief, Including Potential Class Exemption

Sullivan & Cromwell LLP - December 12, 2011

On December 12, 2011, in Announcement 2011-81, the IRS provided temporary relief to IRA owners from the recently issued DOL Advisory Opinion 2011-09A. The announcement provides that, pending further action by the DOL and until issuance of further guidance from the IRS superseding the announcement, the IRS will not view certain indemnification and cross-collateralization agreements as disqualifying an IRA under the Internal Revenue Code unless there has been an execution or enforcement with respect to the indemnification or cross-collateralization agreement.