The Internal Revenue Service has given Section 529 tuition programs the ability to change their investment strategies more frequently in response to the financial crisis.

The college savings plans, named after Section 529 of the Tax Code, will now be able to change their investment strategies twice a year, instead of just once a year. In 2001, the IRS issued rules that allowed such a change annually and when there was a change in the designated beneficiary of the account.

Notice 2009-1 provides a new rule that allows qualified tuition programs to change their investments more frequently in 2009.

"In response to concerns that have been caused by the recent condition of the financial markets, commentators have requested more flexibility in this special rule, specifically the ability to change the investment strategies more frequently," said the IRS. "Those commentators expressed concern that the inability to do so may interfere with the preservation of the value of a Section 529 account in the face of changes in the markets."

The new notice permits a change in the investment strategy selected for a Section 529 account twice per calendar year in 2009, as well as upon a change in the designated beneficiary of the account.

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