On August 14, 2019, the IRS issued Revenue Ruling 2019-19,
providing guidance to both tax-qualified plan administrators and
participants on the tax treatment of plan distribution checks that
are not cashed.
Background
In recent years, the issue of uncashed distribution checks has
gained increased attention (and scrutiny) from the DOL and IRS and,
as a result, has become a primary concern for plan administrators.
Despite the best efforts of plan administrators to ensure that
terminated participants receive their funds, it is common for
checks to go uncashed, particularly in those situations where
distribution was mandatory (e.g., account balances that are less
than $1,000 and minimum required distributions).
