Understanding Employee Benefits and key developments in the employee benefits field and items of interest to our clients. MORE

I blogged in the past (here and here)about decisions in which taxpayers have used assets in their IRA to finance a new business. This structure is sometimes known as a ROBS or rollover for business startups. In 2013, the tax court held that an IRA engaged in a prohibited transaction, thereby subjecting the

This post deals with protecting IRAs in bankruptcy – and the IRA was ultimately protected – but the arguments made are ones that only an ERISA junkie might appreciate.

1. IRAs are protected in bankruptcy only if the IRAs are tax exempt.

2. IRAs are tax exempt only if they do not engage in prohibited

Various promoters have suggested to entrepreneurs that they use the assets in their 401(k) plans or IRAs to finance a new business. These programs are sometimes known by the acronym ROBS, or Rollovers as Business Start-ups. The basic structure involves the entrepreneur’s rollover from a prior employer of the amount in his or her qualified