The written explanation must cover:
- the direct rollover rules
- the mandatory income-tax withholding on distributions not directly rolled over
- the tax treatment of distributions not rolled over (including the special tax treatment available for certain lump-sum distributions)
- when distributions may be subject to different restrictions and tax consequences after being rolled over.
The EGTRRA-expanded explanation must include information about whether a later distribution from an eligible retirement plan may be subject to restrictions and tax consequences, which are different from the plan that made the first distribution.
Full text of the IRS notice is – or will soon be – at ftp://ftp.irs.ustreas.gov/pub/irs-drop/n-02-3.pdf