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Treasury won't grant relief for required minimum distribution for this year.

The Treasury has decided against granting any relief to retirees who were hoping to take smaller 2008 distributions from their depleted individual retirement accounts.

Last week, Congress passed a bill suspending--for 2009--rules that force IRA owners over 70 and a half years old, as well as those who have inherited IRAs, to take "required minimum distributions" (RMDs) from these accounts annually. The Treasury Department, meanwhile, had been considering easing the pain for 2008 too.

ormally, the RMD is calculated based on an IRA owner's age (older folks must take out more) and his or her IRA balance on Dec. 31 of the previous year. Outside tax lawyers believed the Treasury had the authority to allow 2008 distributions to be based on some date in late 2008 after the market had tanked. That would have led to smaller required 2008 distributions.

Treasury and the Internal Revenue Service have decided, however, that since Congress has now acted, they will not allow this, according to a letter being sent to several senators and congressmen who had requested help from Treasury.

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Any changes that the Treasury could make administratively for 2008 would be "complicated and confusing for individuals and plan sponsors," the letter states, and the relief would not be available as "uniformly" to taxpayers as the change passed by Congress for 2009. That's because most seniors already have taken their 2008 payouts.

"This will be very upsetting for taxpayers forced to sell in a down market or to take more out of their tax-preferred accounts and transfer them now into taxable accounts," says Clint Stretch, managing principal of tax policy at Deloitte Tax of Treasury’s decision.

So if you were waiting for the Treasury to act (or for an end of the year rally in the market) before withdrawing funds from your IRA, call your broker or fund company now and ask for your 2008 RMD. Or at least find out the last day you can request it.

Vanguard Group gives customers until 4 p.m. on Dec. 31 to call and request their 2008 RMD, but most IRA custodians require more notice. Be careful. If you don't take the money by the end of the year, you could be subject to a 50% penalty on the RMD, in addition to normal taxes.

Pakistani officials, responding to charges by Indian leaders that the attack was carried out by an organization with ties to Pakistan, said Friday that a senior intelligence officer would travel to India, in an apparent attempt to ease tensions between the two nuclear-armed states.

Indian officials said they believe that at least some of the gunmen reached Mumbai by sea. After an interrogation of one of the attackers, Indian intelligence officials said they suspected that a Pakistani Islamist group, Lashkar-i-Taiba, was responsible. An Indian intelligence document from 2006 obtained by The Washington Post said members of the group had been trained in maritime assault.

Authorities said that the death toll had risen to 195 as more bodies were discovered and that 295 people were wounded, in attacks on the hotels, the Jewish center and several other sites in Mumbai. Among the dead were two Americans from Virginia; the American rabbi who ran the city's Chabad-Lubavitch center and his Israeli wife; and three of their visitors, including an American man, an Israeli woman and a man with U.S. and Israeli citizenship. In all, at least 16 non-Indians have been reported killed.

Security forces killed the last gunmen holed up in the Taj Mahal Palace and Tower Hotel here early Saturday and clean-up operations around the sites that had been attacked continued through the day. 

The government used 350 security forces and 400 police officers to capture or kill the gunmen, officials announced at a news conference Saturday. On the basis of preliminary inquiry, we know that there were a total of 10 terrorists. Nine have been eliminated, one is caught," said Vilasrao Deshmukh, the chief minister of the state of Maharashtra, of which Mumbai is the capital. "They split into teams of two for action, and there were four at the Taj."

In Washington, the White House announced that President Bush would speak about the Mumbai attacks at 12:30 p.m. Eastern time.

President-elect Barack Obama spoke Friday evening by phone with Indian Prime Minister Manmohan Singh to offer his condolences for those killed, Obama's office announced Saturday.

Secretary of State Condoleezza Rice spoke by telephone Friday with Obama for the third time since the attacks began to update him on information coming from India.

"These terrorists who targeted innocent civilians will not defeat India's great democracy, nor shake the will of a global coalition to defeat them," Obama said in a statement. "The United States must stand with India and all nations and people who are committed to destroying terrorist networks, and defeating their hate-filled ideology."

Deshmukh denied that there was any final statement to make about the nationality of the slain gunmen. But he said that the government was only certain that the one in their custody had confessed to being from Pakistan. He said Indian officials had no specific intelligence about an impending attack.

"The information that we get is always general, not specific. Mumbai is always on the target, it is a commercial city, it is an international city," he said. "It is a sensitive place, there is no denying that. But this kind of attack, not just on Mumbai but also on the nation, is something we did not anticipate."