Leaderboard

The current § 415 rules do not predate § 403(b)(7) accounts. Rather, the confusing text results from some legal drafters’ style or usage, often unfortunate, that assumes a reader’s awareness (sometimes with no signal) of all terms that have been specially defined. For agency rules to implement and interpret IRC § 415, the April 7, 2007 rules replaced the January 7, 1981 rules. https://www.govinfo.gov/content/pkg/FR-2007-04-05/pdf/E7-5750.pdf Congress enacted § 403(b)(7) on September 2, 1974, effective as of January 1, 1974. At least the 2007 revisors might have considered it unnecessary it to state explicitly that § 1.415(j)-1(e)’s reference to “a section 403(b) annuity contract” includes all the individual’s § 403(b) contracts. Internal Revenue Code § 403(b)(5) states: “If for any taxable year of the employee this subsection applies to 2 or more annuity contracts purchased by the employer, such contracts shall be treated as one contract.” And § 403(b)(7)(A) begins: “For purposes of this title, amounts paid by an employer described in paragraph (1)(A) to a custodial account which satisfies the requirements of section 401(f)(2) shall be treated as amounts contributed by him [the employer] for an annuity contract[.]” Likewise, the agency rules include this: “Section 403(b) and § 1.403(b)-3(a) only apply to amounts held in an annuity contract (as defined in § 1.403(b)-2), including a custodial account that is treated as an annuity contract under paragraph (d) of this section, or a retirement income account that is treated as an annuity contract under § 1.403(b)-9.” 26 C.F.R. § 1.403(b)-8(a). Some Treasury department lawyers worked on the § 415 rules (published April 7, 2007) and the § 403(b) rules (published July 26, 2007) around the same time. https://www.govinfo.gov/content/pkg/FR-2007-07-26/pdf/07-3649.pdf About the statement to be attached to the individual’s tax return, I don’t advise anyone; but a lawyer or certified public account might evaluate this: My limitation year for § 403(b) contracts is each year ended with August. A change must comply with 26 C.F.R. § 1.415(j)-1(d).

Yep