Great observation! You are correct, the Notice is very clear on that point, and I had not noticed this provision before. The Notice does substantially increase the authority over that of the prior letter rulings, however I still do not understand why 402(c)11 is limited to a non spouse beneficiary or why the 402(f) notice does not clearly outline this option for plan distributions so that spousal beneficiaries are aware of their options. So we are farther along than before, but I still wonder when this will be incorporated in the actual tax code and 402f Notice requirements. Since the spousal rollover options are the same as the participant, when the Notice refers to “IRA”, I assume that this includes Roth IRAs, as well as TIRAs. There was also a recent discussion here about a spouse opting to roll the benefit over to an inherited Roth IRA for the apparent purpose of avoiding the early withdrawal penalty for distributions of conversions within 5 years and or earnings prior to the 5 year aging is attained.

But 2009-68 does provide considerably more authority for spousal beneficiaries who are struggling to find an IRA custodian to open the inherited IRA to receive the rollover. They should make a copy of this Notice and thereby increase their leverage in setting up the inherited account, be it an inherited TIRA or inherited Roth IRA.

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