As a practical matter, what is the difference between using the relief under the "limited amounts" section of notice 2008-113 and under the "certain other operational failures" section of the notice? The correction methods and penatlies seem to be the same for each, so what is the benefit of having a "limited amount" to correct.

Also, am i correct in saying that the only time insiders cannot get relief under the notice is in the year immediately after the failure (thus avoiding the tax penalties)?

thanks!!

I believe under the limited amount section, the amount that must be included in income is included in income for the year the error was discovered. Under the other section, the amount that must be included in income is included in income for the year it should have been included in income, possibly requiring the filing of amended returns. Limited early payments don't have to be repaid, they are just taxed. In the other section, repayment is required.