Today, Robert Gertner and Claire Diefenbach of the Employee Plans branch of the Internal Revenue Service (the "IRS") conducted a Phone Forum focused on the issues arising out of the ESOP determination letter process. The IRS focused on two of the Technical Assistance ("TA") requests released earlier this year and last year. We thought we would summarize some of the items discussed.
The Internal Revenue Service (the "IRS") recently issued final regulations governing the diversification requirements for certain ESOPs. As discussed in our February 15, 2008 blog article, the IRS issued proposed regulations under section 401(a)(35) of the Internal Revenue Code (the "Code") in January 2008. The final regulations largely incorporate the proposed regulations with a few changes and clarifications.
For the first time, the IRS is requiring that detailed ESOP distribution rules be provided to the IRS as part of the ESOP's determination letter submission.
In a recent California case, Balsley v. Delta Star Employee Stock Ownership Plan, the U.S. District Court in San Francisco added a little flesh to the bare bones questions of what if any financial disclosure must a company make to ESOP participants in connection with their benefit distributions.
ESOP Diversification
The January 1, 2007 effective date of the new investment diversification rules for ESOPs with publicly traded stock got us thinking about the diversification rules that extend to companies whose stock is not publicly traded. These rules include some rather difficult timing requirements for most ESOP companies.Enter keywords:
