Subject: Newsletter: Form 5304-SIMPLE Issued by IRS
Date: Thu, 9 Jan 1997 15:34:10 -0500

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..........IRS PUBLISHES FORM 5304-SEP FOR SIMPLE PLANS....

A new tax form enables an employer to establish an
IRS-approved "SIMPLE plan" even if the employer allows
employees to designate their IRA custodians rather than
making all contributions to a single financial
institution selected by the employer.

The form is titled Form 5304-SIMPLE, and was released on
December 31.

It is not yet available for download from the IRS Web
site, but should be online there soon.

(For a Web link to IRS forms and publications, see the
"Benefits Resources" page on BenefitsLink at
http://www.benefitslink.com)

New Form 5304-SIMPLE is very similar to Form 5305-SIMPLE;
the latter form was issued by IRS in October to provide an
IRS-approved form of SIMPLE plan but only if the
sponsoring employer makes all employees' contributions to
IRAs maintained by a single IRA custodian (called a
"Designated Financial Institution").

Yesterday's BenefitsLink Newsletter described IRS Notice
97-6, a set of questions and answers about SIMPLE plans
issued on December 23
(http://www.benefitslink.com/IRS/97-6.html).  That IRS
Notice included a complicated series of instructions for
modifying Form 5305-SIMPLE, if an employer wants to use
that form but also wants to allow employees to use
multiple IRA custodians instead of a single Designated
Financial Institution.

Form 5304-SIMPLE, issued a week after the IRS Notice,
seems to be a simple way to avoid having to mark up a Form
5305-SIMPLE, because it already incorporates the
modifications described in the IRS Notice and appears to
be otherwise identical.

(SIMPLE, no?  Stay tuned.)

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