The IRS has issued a memorandum containing audit guidelines for schemes that are marketed as a means of giving prospective business owners access to accumulated tax-deferred retirement funds without paying distribution taxes in order to fund new business start-up costs. According to the memo, “an attribute common to this design is the assignment of newly created enterprise stock into a qualified plan as consideration for these transferred funds, the valuation of which may be questionable.”

Tags: 401k, rollover