"IRS to IRAs: Lien on Me (For Now)"

On December 12, 2011, the Internal Revenue Service issued Announcement 2011-81 (the "Announcement"), which provides "temporary relief with respect to Individual Retirement Accounts ("IRAs") in circumstances in which the IRAs' owners have signed certain indemnification agreements or granted certain security interests in accounts that may have an effect on their IRA." 

This Stroock Special Bulletin provides an overview of the Announcement, which is a follow-up to the recently released Department of Labor ("DOL") Advisory Opinion 2011-09A. As we noted in our article "Could Recent DOL Opinion Cause Unnecessary IRAtation?", if taken to its logical conclusion, the Advisory Opinion could be read in a manner that calls into question established understandings by most practitioners concerning the application of Prohibited Transaction Class Exemption ("PTCE") 80-26.