Who's Online
7 user(s) are online ( 2 user(s) are browsing Articles, News and Announcements)
Members: 0
Guests: 7
more...
|
Big Story - Articles, News & Announcements There isn't a Biggest Story for Today, yet.
Top Articles, News & Announcements
|
Request for Technical Assistance (#1) Posted by esopwebmaster
(392)
|
| MEMORANDUM FOR DANIEL R. JONES, MANAGER, EMPLOYEE PLANS DETERMINATIONS QUALITY ASSURANCE
FROM: Andrew E. Zuckerman, Director, Employee Plans Rulings and Agreements
SUBJECT: Request for Technical Assistance (#1)
This Memorandum is in response to your Request for Technical Assistance, dated March 6, 2009, concerning immediate resale provisions in employee stock
ownership plans (within the meaning of Internal Revenue Code section 4975(e)(7)) and Internal Revenue Code section 409(h).
Issues
1. Whether a distribution from an employee stock ownership plan (“ESOP”) of stock that is subject to an immediate resale provision meets the requirements of Internal Revenue Code (“Code”) section 409(h), specifically the put option requirement of Code section 409(h)(1)(B).
2. Whether the immediate resale provisions set forth in Rev. Proc. 2003-23, as modified by Rev. Proc. 2004-14, may be applied to any distributions of stock from an ESOP or are limited solely to situations involving the rollover of S corporation stock from an S corporation ESOP to an IRA.
3. Whether distributions from an ESOP of stock that is subject to immediate resale provisions, in the case of a plan under which the trustee or plan administrator has discretion to determine which participants will receive distributions in cash and which participants will receive distributions in the form of
employer securities, violates the nondiscrimination requirements of the Code. |
|
|
-
[1294]
DOL issues Guidance on ERISA Fidelity Bonding Requirements
The Department of Labor released Field Assistance Bulletin 2008-4 on November 25, 2008 to provide guidance on ERISA Fidelity Bonding Requirements. This Bulletin provides guidance, in a question and answer format, concerning the application of ERISAs bonding requirements and the Pension Protection Act changes. As of January 1, 2006, the maximum required bond ceiling was increased to $1,000,000. A full copy of the Bulletin is available via the downloads section of www.ESOP.US
-
[1245]
IRS Final Sec. 108 Regulations Apply to Losses allocable to ESOP Shareholder
The IRS issued final regulations regarding Section 108 - Reduction of Tax Attributes for S Corporations, and the IRS preamble to the final regulations confirms that disallowed losses and deductions under section 1366(d)(1) of a shareholder that is an employee stock ownership plan (ESOP) are included in the S corporation’s deemed NOL. The IRS stated position is that Section 108(d)(7)(B) provides that any loss or deduction that is disallowed for the taxable year of the discharge under section 1366(d)(1) is treated as a deemed NOL of the S corporation. Accordingly, section 108(d)(7)(B) applies to any shareholder, including an ESOP shareholder, that has disallowed losses and deductions for the taxable year of the discharge under section 1366(d)(1).
-
[1090]
S Corporation Cannot Deduct Accrued Expenses for Related Parties
from: Employee Plans News - August 2, 2010
If an Employee Stock Ownership Plan (ESOP) owns an S corporation’s stock, that S corporation may not deduct any accrued expenses for any ESOP participant, including retirement plan contributions based on accrued compensation.
Under Code §267(a)(2), a taxpayer, including an S corporation, may only deduct an expense in the same tax year that the payment is reported as income by a related party. Under Code §267(e)(1)(B)(ii), a related party includes any person who directly or indirectly own any of that S corporation’s stock. Therefore, if an ESOP holds an S corporation’s stock, that ESOP’s participants indirectly own stock in the S Corporation. These participants do not include accrued compensation in their income...
-
[872]
Response to Technical Assistance Request (#4)
MEMORANDUM FOR DANIEL R. JONES, MANAGER, EP DETERMINATIONS QUALITY ASSURANCE
FROM: JoAnna H. Weber, Acting Director, Employee Plans Rulings and Agreements
SUBJECT: Response to Technical Assistance Request (#4)
This memorandum is in response to your Request for Technical Assistance, dated April
3, 2009, with regard to rebalancing and reshuffling provisions in employee stock ownership plans (“ESOPs”) (within the meaning of Internal Revenue Code (“Code”) section 4975(e)(7)) and stock bonus plans. The guidance in this memorandum is to be used to determine appropriate plan language. Please contact us if additional guidance is needed with respect to specific plan provisions.
Issues:
1) Whether an ESOP or stock bonus plan can...
-
[812]
FR-3 (Fiduciary Responsibility) (ERISA Section 402(a))
FR-3 Q: May an employee benefit plan covering employees of a corporation designate the corporation as the ``named fiduciary'' for purposes of section 402(a)(1) of the Act?
A: Yes, it may. Section 402(a)(2) of the Act states that a ``named fiduciary'' is a fiduciary either named in the plan instrument or designated according to a procedure set forth in the plan instrument. A fiduciary is a ``person'' falling within the definition of fiduciary set forth in section 3(21)(A) of the Act. A ``person'' may be a corporation under the definition of person contained in section 3(9) of the Act. While such designation satisfies the requirement of enabling employeesand other interested persons to ascertain the person or persons responsible for operating the plan, a plan instrument which...
-
[793]
Great ESOP Reading!
Just Published - "ESOP Forever" a book about the sustainable ESOP by acclaimed ESOP financial expert Thomas G. King, financial consultant to the design and implementation of America's first S corporation ESOP. The book is available in both paperback and hardcover format through AuthorHouse Publishing at www.authorhouse.com
-
[721]
Sherburne Tele Systems, Inc. seeks Prohibited Transaction Exemption for Sgare redemption
Application Nos. and Proposed Exemptions; D-11569, Sherburne Tele Systems, Inc.; and D-11597, John D. Simmons Individual Retirement Account; et al. [8/6/2010]
[note-the IRA related application and proposed exemption are omitted from this reprint]
Federal Register: August 6, 2010 (Volume 75, Number 151)]
[Notices]
[Page 47639-47644]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au10-129]
DEPARTMENT OF LABOR
Employee Benefits Security Administration
Application Nos. and Proposed Exemptions; D-11569, Sherburne Tele
Systems, Inc.; and D-11597, John D. Simmons Individual Retirement
Account; et al.
AGENCY: Employee Benefits Security...
-
[677]
FR-6 (Fiduciary Responsibility) (ERISA Section 402(c)(3))
FR-6 Q: May an investment adviser which is neither a bank nor an insurance company, and which is neither registered under the Investment Advisers Act of 1940 nor registered as an investment adviser in the State where it maintains its principal office and place of business, be appointed an investment manager under section 402(c)(3) of the Act?
A: No. The only persons who may be appointed an investment manager under section 402(c)(3) of the Act are persons who meet the requirements of section 3(38) of the Act--namely, banks (as defined in the Investment Advisers Act of 1940), insurance companies qualified under the laws of more than one state to manage, acquire and dispose of plan assets, persons registered as investment advisers under the Investment Advisers Act of 1940, or...
-
[647]
Fiduciary Investigations Program
The United States Department of Labor
Employee Benefits Security Administration
Fiduciary Investigations Program
1. Statutory Requirements. The Employee Retirement Income Security Act (ERISA) expressly confers upon the Secretary direct responsibility and authority to investigate fiduciary violations of Title I of ERISA. In accordance with that authority, Program 48 will be used to investigate violations involving ERISA, Title I, part 4, sections 402, "Establishment of plan," 403, "Establishment of trust," 404, "Fiduciary duties," 405, "Liability for breach of co-fiduciary," 406, "Prohibited Transactions," 407, "10 percent limitation with respect to acquisition and holding of employer securities and employer real property by certain plans," 409, "Liability for breach...
-
[631]
Sample Plan Language - Transfer of an ESOP’s S Corporation Shares to Prevent a Nonallocation Year
employee plans news
Volume 9 - Spring 2009
The IRS has posted sample plan language for ESOPs, which revises the language released in the July 1, 2008 Special Edition of Employee Plans News. The language may serve as part of a comprehensive set of plan provisions designed to prevent the occurrence of a nonallocation year.
An 1120S corporation ESOP has a nonallocation year when disqualified persons are deemed to own 50% of the outstanding stock of the S corporation, taking into account synthetic equity. During a nonallocation year, disqualified persons may not accrue or be allocated any portion of plan assets consisting of employer securities. Such prohibited transactions in a nonallocation year are treated as deemed distributions from the plan. In addition, upon the...
|
Topics - Articles, News & Announcements
Archives - Articles, News & Announcements
|
|
