Rev. Rul. 75-530

In light of the enactment of section 408 of the Internal Revenue Code of 1954, relating to individual retirement accounts, further consideration has been given to Rev. Rul. 56-267, 1956-1 C.B. 206.

Rev. Rul. 56-267 holds that the status of individual trusts as "qualified" under section 401(a) of the Code and exempt from tax under section 501(a) will not be affected by the pooling of their funds in a group trust if the requirements stated in that Revenue Ruling are satisfied. Rev. Rul. 56-267 also holds that the group trust will constitute a qualified trust under section 401(a) and will be exempt from tax under section 501(a) if the requirements stated in the Revenue Ruling with respect to the group trust are satisfied.

Section 408(e)(1) of the Code, as added by the Employee Retirement Income Security Act of 1974, Public Law 93-406, 1974-3 C.B., provides for the exemption from taxation of individual retirement accounts which meet the requirements of section 408. Section 408(a)(5) provides that the assets of the trust (individual retirement account) may not be commingled with other property except in a common trust fund or common investment fund. With regard to section 408(a)(5), the Committee of Conference stated that, following Rev. Rul. 56-267, the conferees intend that the assets of qualified individual retirement accounts may be pooled with the assets of qualified section 401(a) trusts, without adversely affecting the tax-qualification of either the individual retirement accounts or the section 401(a) trusts. The conferees intend that the group trust itself will be entitled to exemption from tax under the Code in accordance with the rules of Rev. Rul. 56-267. See Conference Report No. 93-1280, 93rd Cong., 2nd Sess. 337 (1974), 1974-3 C.B. 416, at page 498.

Accordingly, the exempt status of a group trust described in Rev. Rul. 56-267 and the exempt status of the individual trusts which pool their funds in such group trust are not adversely affected by the creation or amendment of a group trust instrument in order to permit the trust to receive and hold funds of individual retirement accounts that have adopted the group trust and otherwise meet the requirements of section 408 of the Code.

A group trust is exempt from taxation under section 501(a) of the Code with respect to its funds which equitably belong to participating trusts described in section 401(a). A group trust is exempt from taxation under section 408(e) with respect to its funds which equitably belong to individual retirement accounts.

Rev. Rul. 56-267 is hereby modified to permit the group trusts described therein to receive and hold funds of trusts that meet the requirements of section 408 of the Code

¹ Also released as TIR-1418, dated November 6, 1975.