What is IRS code 1551?

IRS Code 1551 refers to a provision in the Internal Revenue Code that allows for the deferral of taxes on certain distributions from qualified retirement plans. Specifically, it is associated with the tax treatment of distributions from defined contribution plans when a participant separates from service. The code aims to provide tax relief by permitting the deferral of income tax on these distributions until they are actually received. This provision is part of broader efforts to encourage retirement savings and provide flexibility for plan participants.