IRS rules that deemed elections to contribute ESOP dividend distributions to a s. 401(k) plan qualify as a cash or deferred arrangement

Article Abstract:

This article concerns Private Letter Ruling 199921056 where the IRS ruled that a qualifying deferral under IRC section 401(k) resulted from an employer's deemed elections increasing by an equivalent amount to employee stock ownership plan distributions, salary deferral elections. The ruling expands upon Revenue Ruling 98-30 where negative elections were introduced allowing employers to enroll employees in 401(k) plans as long as proper notice is given and employees have contribution options.

Taxation, Distribution, Salary reduction savings plans, 401K plans

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IRS issues final regulations on distributions of employer securities under S corporation ESOPs and plan amendment deadlines for adopting changes

Article Abstract:

The IRS issued final regulations providing guidance regarding S corporation employee stock ownership plans which reflect an important change made by the Taxpayer Relief Act of 1997. The act provided an exemption under IRC section 409(h)(2) which allows S corporation ESOPs to make non-employer securities distributions. That change created possible conflicts with IRC section 411(d)(6) and the need for guidance.

Management, Securities, S corporations

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Employee investment trusts

Article Abstract:

The authors examine tax and securities issues regarding employee investment trusts.

Evaluation, Investment companies

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