Page:United States Statutes at Large Volume 100 Part 3.djvu/608

 100 STAT. 2416

PUBLIC LAW 99-514—OCT. 22, 1986

(c) TREATMENT OF DISTRIBUTIONS.—Paragraphs (1) and (2) of section 408(d) (relating to tax treatment of distributions) are amended to read as follows: "(1) IN GENERAL.—Except as otherwise provided in this subsection, any amount paid or distributed out of an individual retirement plan shall be included in gross income by the payee or distributee, as the case may be, in the manner provided under section 72. "(2) SPECIAL RULES FOR APPLYING SECTION 72.—For purposes of applying section 72 to any amount described in paragraph (1)— "(A) all individual retirement plans shall be treated as 1 contract, "(B) all distributions during any taxable year shall be treated as 1 distribution, and "(C) the value of the contract, income on the contract, and investment in the contract shall be computed as of the close of the calendar year with or within which the taxable year ends. For purposes of subparagraph (C), the value of the contract shall be increased by the amount of any distributions during the calendar year." (d) PENALTY FOR REPORTING NONDEDUCTIBLE CONTRIBUTIONS NOT MADE.—

(1) IN GENERAL.—Section 6693 (relating to failure to provide reports on individual retirement accounts or annuities) is amended by redesignating subsection (b) as subsection (c) and by inserting after subsection (a) the following new subsection: "(b) OVERSTATEMENT OF DESIGNATED NONDEDUCTIBLE CONTRIBU-

TIONS.—Any individual who— "(1) is required to furnish information under section 408(o)(4) as to the amount of designated nondeductible contributions made for any taxable year, and "(2) overstates the amount of such contributions made for such taxable year, shall pay a penalty of $100 for each such overstatement unless it is shown that such overstatement is due to reasonable cause." (2) CONFORMING AMENDMENTS.—

(A) Section 6693(c), as redesignated by paragraph (1), is amended by striking out "subsection (a)" and inserting in lieu thereof "this section". (B) The heading for section 6693 is amended by inserting "; OVERSTATEMENT OF DESIGNATED NONDEDUCTIBLE CONTRIBUTIONS" after " A N N U I T I E S ".

(C) The item relating to section 6693 in the table of sections for subchapter B of chapter 68 is amended by inserting "; overstatement of designated nondeductible contributions" after "annuities". (e) SPECIAL RULES RELATING TO REQUIREMENTS OF TRUSTEES OF INDIVIDUAL RETIREMENT PLANS.—

(1) WITHHOLDING.—Subparagraph (B) of section 3405(d)(1) (relating to exceptions) is amended by adding at the end thereof the following new flush sentence: "For purposes of clause (ii), any distribution or payment from or under an individual retirement plan shall be treated as includible in gross income." (2)

TIME FOR REPORTING INFORMATION WITH RESPECT TO INDIVIDUAL RETIREMENT PLANS.—The last sentence of section

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