Definition
A document provided to participants, explaining certain provisions in non-technical terms.
For IRAs, each participant must be provided with a disclosure statement , which provides explanations on topics including the following:
- The statutory requirements for establishing the IRA
- The limitations and restrictions on the deductions for contributions made to the IRA
- The circumstances under which the IRA may be revoked
- The effect of engaging the IRA in a prohibited transaction
- The tax treatment of distributions
- An explanation of penalties that may apply
- Required minimum distribution requirements
Referring Cite
Treas. Reg. §1.408-6(d)(4)
Additional Helpful Information
- Providing the IRA owner with a copy of IRS Publication 590 may fulfill the disclosure requirement
