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Rollovers as Business Startups: Here to Stay? [2018]
Presentor: David Schultz Recorded Date: 5/31/2018 Duration: 60 Min.

This program was recorded during a live presentation given on May 31, 2018 at 12:00PM EST.

Years ago, a number of firms started promoting 401(k) plans which allow entrepreneurs to use IRA or qualified plan assets to finance the purchase of franchises and other startup businesses. Most practitioners have viewed these arrangements with understandable skepticism about the legality and prudence of such arrangements. The IRS has issued a set of examination guidelines to deal with these transactions and the acronym the IRS has chosen to use only increased the concerns of many practitioners: ROBS (Rollovers as Business Startups).

Yet, it seems that ROBS are here to stay. The guidelines do not rule these arrangements out per se. But they do provide a road map for IRS personnel to use in deciding whether to challenge a ROBS plan, with a focus on nondiscrimination and prohibited transaction issues. This Web seminar will discuss these arrangements and the potential problems they pose. We’ll look in depth at the guidelines and show you the problems, pitfalls, and potential of ROBS, so you can judge for yourself and advise your clients appropriately.

Topics include:
  • ROBS overview
  • Issues and analysis
  • Nondiscrimination
  • Multiple potential prohibited transactions
  • Exclusive benefit rule
  • Permanence requirement
  • Plan communication
  • Invalid valuations
  • Filing
  • IRS enforcement activities

No prerequisite or advanced preparation is required for this course. However, attendees should have a general understanding of the operation of qualified plans and have a minimum of one year of experience. Attendees do not need to understand the operation of ROBS arrangements.

Level: Intermediate.
Instructional Delivery Method
Group – Internet-Based

NASBA Field of Study: Taxes

Speaker: David Schultz, J.D.

Objectives: After attending this seminar, attendees should be able to:

  • Explain a Rollover as Business Startup arrangement
  • Identify effective availability of benefits, rights, and features offered by a ROBS
  • Identify issues with discriminatory timing of amendments
  • Assess whether a ROBS arrangement is likely to satisfy the IRS guidelines