Financing a Business Startup or Acquisition Using Rollover Funds

Journal of Financial Planning; June 2014


Patricia D. Hopson, CPA, is a tax accountant and business consultant. She is a graduate of Stephen F. Austin State University and Texas A&M University—Kingsville. Prior to moving to Myrtle Beach, South Carolina, she had her own CPA practice in Seguin, Texas.

James F. Hopson, J.D., CPA, is semi-retired and a former accounting and tax professor. He is a graduate of Dallas Baptist University, University of Houston, and Southern Methodist University Law School. He practiced law in Seguin, Texas concentrating in estate and financial planning and tax law.

Executive Summary

  • Financial planners are likely to have clients who are interested in owning their own businesses. Retirement accounts are often the clients’ only available source of significant funds to finance the startup or purchase.
  • The taxes and penalties resulting from accessing funds in a retirement account can significantly reduce the money available for funding. A solution may be Rollovers as Business Startups (ROBS) plans.
  • For clients who can follow the rules in establishing a ROBS and comply with the future reporting requirements and regulations, a ROBS provides an attractive alternative path to financing a new business.
  • An IRS ROBS memorandum, designed to guide IRS staff through auditing a ROBS, can serve as a road map for advisers and clients.
  • This paper examines issues raised by the IRS memorandum, explains the steps to setting up a ROBS, and reviews the IRS and DOL operations and compliance aspects governing ROBS.

It is hardly news that in today’s lending environment, entrepreneurs are finding it difficult to secure conventional loans for startup businesses or for the acquisition of existing businesses or franchises. Even to secure a government-backed Small Business Administration (SBA) 7(a) loan requires that the borrower provide material sums of money to help finance the venture and usually a personal guarantee on the loan.

Many current and potential financial planning clients have either lost their jobs, been reduced to part-time employees, or feel insecure about their present job status. These individuals are not only interested in, but often dream about, owning their own businesses. The only thing standing in their way is funding. Many have substantial funds tied up in retirement accounts, which they would like to access without paying taxes and penalties. Unfortunately, these retirement accounts are often their only available source of significant funds. However, after reviewing the cost of withdrawing funds before they reach 59½ years of age, clients are often reluctant to withdraw the funds because of early withdrawal tax penalties plus the income tax on withdrawn funds. The tax and penalty significantly reduce the money available.

The solution may be a Rollover as Business Startups (ROBS) plan, sometimes called a Business Owners Retirement Savings Account (BORSA). The Entrepreneur Rollover Stock Ownership Plan (ERSOP®) is a commercially available system designed for the same purpose.

Understanding ROBS

A ROBS is created by rolling over existing funds from a 401(k), 401(a), 403(b), 457 plan, or IRA into a qualified defined contribution plan (usually a pre-approved prototype profit-sharing plan) without triggering taxes, penalties, or interest. Because the plans are typically defined contribution plans, they avoid the more complex defined benefit rules and the mandatory funding requirements.

Typically, an Internal Revenue Service (IRS) preapproved prototype plan is amended to provide that the plan’s participating employees may invest their entire rolled over retirement account into company stock. Once the client has rolled over the desired amount of funds into the new company’s plan, the participant then directs the administrator to invest entirely in their new company. The result is that funds have been moved from one tax-exempt plan to another tax-exempt plan and then invested in the new business, thus avoiding penalties and taxes on distributed funds. The new company has its startup money and the qualified plan owns most, if not all, of the new company’s stock.

In an October 1, 2008 memorandum1, the IRS stated, “Although we do not believe that the form of all of these transactions may be challenged as non-compliant per se, issues should be examined on a case-by-case basis.” In other words, for clients who can follow the rules in establishing a ROBS and comply with the future reporting requirements and regulations, a ROBS provides an attractive alternative path to financing a new business. 

However, ROBS are not a viable financing alternative for clients who are unable or unwilling to meet compliance deadlines, or worse, are sloppy in complying with mandatory IRS and Department of Labor (DOL) regulations and required procedures within plan documents. If a ROBS is not properly established or operated, the IRS can declare the plan invalid (retroactively revoking the plan’s status as a qualified plan) and assess taxes and penalties applicable to early distribution. For lesser violations, the IRS may impose adjustments to the plan and/or additional taxes and penalties. The following discussion illustrates the use of ROBS in practice.

Example A

Client A is 45 years old. He worked his way up into a high mid-manager job when the recession forced his company to downsize. He was laid off after 22 years of importing goods for resale to the public. Even before the layoff, he had been toying with the idea of opening an Internet retail business selling the products with which he was familiar. He developed a well-thought-out business plan, talked to a qualified web designer, and investigated advertising opportunities. He is convinced he can provide identical products to the public with a 15 percent to 25 percent cost savings. The savings would come from eliminating the retail store cost, which he also believes will reduce the number of employees he needs to hire. His cost includes a warehouse, but he first intends to work out of his home using his double garage, study, and one bedroom to launch the business. His web design includes:

  • A user-friendly, front-end site for customers to browse products and select items 
  • An ordering system that allows customers to add or delete items to the shopping cart and return to shopping for new items
  • A payment gateway to PayPal and major credit cards 
  • A tracking system for customers to follow their orders 
  • A customer log-in system 
  • A contact form to allow customers to ask questions and receive answers
  • A back-end system hidden to users that allows him to collect and process orders, follow registered users, and control inventory
  • A way to contact registered users with news about items

The client has determined that a well-designed website will cost $10,000 to $12,000 and that he will need two computers at a cost of $5,000. He believes he needs $200,000 in inventory to meet customer demand. He has $50,000 in savings and believes that he can invest $10,000 in the business and have enough cash left to maintain his lifestyle until the business is profitable.

He has $450,000 in qualified plan retirement funds and is willing to use up to half of this amount to launch the business. However, he is concerned about the 10 percent early withdrawal penalty and the income tax effect on his withdrawal and the increase it will have on his tax rate.

A ROBS could provide this client a vehicle to avoid the penalty and taxes on the withdrawal. He has the experience to run his own business and has done his due diligence and is therefore a very suitable client to which to consider presenting the ROBS alternative. 

Example B

Client B is a 36-year-old business college graduate who lost her job as a second line manager in a service business. She has not been able to find alternative employment. She received a severance package that included $55,000 and health insurance for six months. Her husband can add her to his employer health insurance plan, and his salary can support them but only with considerable budget restraint. She has $110,000 in her retirement account that is vested. 

She has researched several franchisors and has found two she thinks are promising. Both franchisors have good success records, but both have records of failure as well. The franchise fee is $100,000 and the only way for her to invest is to withdraw the money from her retirement account. The client does not have any experience in running a business, but she believes that if she follows the franchisor’s systems and takes their training, she can make the business a success. The franchisor also provides assistance with selecting a location and training employees. These are services she intends to use.

She is a candidate for a ROBS. However, because of her business inexperience and limited management experience, she will need someone to make sure she is staying on track with the franchisor systems and is handling problems when they arise. 

Example C

Client C is 54 years old and had been a non-management employee his entire working career when he was laid off. His vested retirement account has a $190,000 balance, and his only additional source of income during retirement is Social Security. His friends tell him what a good cook he is, and based on this, he is thinking about opening a BBQ restaurant.

This client is not a good candidate for a ROBS. He would be risking his retirement savings late in life by entering a very risky business with no prior management experience.

Although the IRS ROBS memorandum was created for internal IRS use to guide its employees on compliance issues related to auditing a ROBS, the memo also is a great road map for clients and their advisers to use if they decide that a ROBS is a viable financing alternative. The remainder of this paper will examine the issues raised by the IRS memorandum, and then explain the steps involved in setting up a ROBS. The paper will conclude with a review of operations and compliance aspects of ROBS to avoid tripping over IRS and DOL rules governing ROBS.

IRS Concerns

Under ERISA, the IRS and DOL have joint enforcement of employee qualified plans. The DOL is primarily concerned about fiduciary duties, while the IRS is concerned with tax issues including funding and vesting. The IRS acknowledges that ROBS can serve legitimate tax and business needs and has issued favorable determination letters for ROBS plans. The IRS also acknowledges that there are several pre-approved prototypes that have been reviewed and approved by the service. Even so, the IRS has voiced concerns. Concerns are not about the plans per se, but the plans’ significant disqualifying operational defects. That is, after the plan is adopted, the client may be deemed to violate IRS and/or DOL regulations in operating a ROBS. Some of these operational defects include:

  • Failure to notify rank and file employees of the existence of the plan and their rights to participate in the plan and purchase available company stock
  • Plan assets that are not valued or valued with a threadbare appraisal
  • Annual reports (Form 5500 or 5500-EZ) that are not filed
  • Clients’ use of plan assets for personal, non-business purchases

The IRS is concerned with two major ROBS issues in relation to these defects. The first are violations of the nondiscrimination requirements of Treasury Regulation §1.401(a)(4)-4. The second involves prohibited transactions due to deficient stock valuation. These defects are discussed in more detail below.

Nondiscrimination Requirements

The nondiscrimination rules of IRC §401(a)(4) plans prohibit discrimination in favor of highly compensated employees (HCEs), which IRC §414(q)(1)(A) defines as either a 5 percent owner under the attribution rules of IRC §3182 or an employee with compensation in the preceding year from the employer in excess of $115,000 for 2012, 2013, and 2014.

The IRS will examine the plan’s benefits, rights, and features to determine if they are nondiscriminatory in effect, including the right to make investments in employer securities. In other words, the IRS will make sure that HCEs are not disproportionately benefited by the plan. The easiest way to avoid this issue is not having any HCEs in the initial years of operation, which for a startup company may not be by design but by necessity. Another option is have only HCE employees. The latter may occur simply because the company has no other employees except the client.

If there are no non-HCE (NHCE) employees, the IRS concedes that a finding of discrimination cannot be made because the current standards are satisfied. However, the IRS may be suspicious that intent to discriminate against NHCEs exists when plans are amended to prohibit future investment in company stock immediately after the plan invests in the company. Many clients do not want employees purchasing stock under the plan; therefore, though not recommended and strongly discouraged, caution should be used in timing any amendment to the qualified plan that precludes others from receiving stock.

The IRS view is that “ROBS cases should be developed for discrimination issues whenever a given plan covers both HCEs and NHCEs, and no extension of the stock investment option is afforded to NHCEs.” Because there are no code sections, regulations, or cases that would require a company to make open-end or additional stock offerings, the issue does not arise if the company does not make any additional stock offerings. The client may be the only employee when the company initially offers stock, but even if the company does not plan on offering additional stock, employees should be advised in writing when hired that they have the right to make rollover contributions to the plan, and if the company makes additional stock offerings, that they can direct some or all of their plan assets to be invested in the company.

If a plan is found to discriminate, Treasury Regulation (Reg.) §1.401(a)(4) provides a path for amending the plan to correct the problem, but the plan’s benefits, rights, and features must be available to employees after the amendment.

Prohibited Transactions and Valuation of Stock

The second key issue that the IRS will examine is a valuation-related prohibited transaction. That is, is the valuation supported by proper valuation techniques and analysis? The IRS memorandum states: 

In all ROBS arrangements, an aspiring entrepreneur creates capital stock for the purpose of exchanging it for tax-deferred accumulation assets. The value of the stock is set as the value of the available assets. An appraisal may be created to substantiate this value, but it is often devoid of supportive analysis. We find this may create a prohibited transaction, depending on the true enterprise value.

Currently, there are no requirements that a qualified pension plan obtain an appraisal, but the IRS ROBS memorandum also states, “the lack of a bona fide appraisal raises questions.” The Fifth Circuit Court of Appeals in Donovan vs. Cunningham at 716 F.2d 1455 (1983) explained that the adequate consideration test, like the prudent man rule, is expressly focused upon the conduct of fiduciaries. A court reviewing the adequacy of consideration under ERISA Section 3(18) is to ask if the price paid is “the fair market value of the asset as determined in good faith by the ... fiduciary, ... this is not a search for subjective good faith—a pure heart and an empty head are not enough ... good faith in Section 3(18) must be read in light of the over-riding duties of Section 404 ... Doing so, we hold the ... fiduciaries will carry their burden to prove that adequate consideration was paid by showing that they arrived at their determination of fair market value by way of a prudent investigation in the circumstances then prevailing."

If the appraisal is deemed to be unsupported by documentation that explains the process and procedures used to estimate the economic value of the company’s stock, the entire ROBS arrangement could be identified by the IRS as a prohibited transaction. If an IRS audit finds a prohibited transaction, the penalty for violating the prohibited transaction requirements of IRC §4975 is substantial—a 15 percent tax of the amount involved in the prohibited transaction. If the issue is not corrected within the taxable period, the penalty is increased to a 100 percent tax. 

The appraisal of the corporation should be performed by a qualified appraiser annually, beginning with the appraisal of the corporation at its startup. IRC section 170(f)(11)(E) defines a qualified appraiser as an individual who:

  • Has earned an appraisal designation from a recognized professional appraiser organization or has otherwise met minimum education and experience requirements set forth in regulations prescribed by the Secretary
  • Regularly performs appraisals for which the individual receives compensation
  • Meets such other requirements as may be prescribed by the Secretary in regulations or other guidance 

IRC section 170(f)(11)(E) further clarifies that an individual shall not be treated as a qualified appraiser with respect to any specific appraisal unless:

  • The individual demonstrates verifiable education and experience in valuing the type of property subject to the appraisal.
  • The individual has not been prohibited from practicing before the IRS by the Secretary under section 330 (c) of title 31, United States Code, at any time during the three-year period ending on the date of the appraisal. 

The following list of organizations have established certification programs with a reputation for producing qualified business appraisers:

  • American Society of Appraisers (ASA) designates members as ASA-accredited senior appraisers.
  • American Institute of Certified Public Accountants (AICPA) designates members as ABVs (accredited in business valuation).
  • Institute of Business Appraisers (IBA) designates members as CBAs (certified business appraisers).
  • National Association of Business Certified Valuation Analysts (NACVA) designates members as CVAs (certified valuation analysts). 

When valuing the company, the appraiser will ask questions to verify that the business has actually started operation. The appraiser will also verify the business’s assets, including cash, franchise license, property, and equipment. Additionally, the appraiser will identify what shares of corporate stock have been issued, to whom, and the price paid. Because appraising the value of closely held stock is not unique to ROBS, it is not covered here.

The ROBS Process
After a client has considered the risks of a ROBS, and decided to use their retirement funds in a ROBS arrangement to fund an acquisition or startup of a business, the following process should be carefully followed by the client and their financial planning adviser. The planner should coordinate this process, making sure each step is carefully followed and completed.

With the assistance of the client’s accountant and attorney, the planner should assist the client by providing the information needed to create a C-corporation3 and ensure that an organizational meeting is held and documents properly executed and understood by the client. Typically, the attorney will take care of filing the corporate documents with the client’s Secretary of State office, while the accountant will obtain a tax identification number (EIN) for the new C-corporation. 

This new corporation will authorize a number of shares, but the shares will not be issued at the time of incorporation. With the corporate documents, the attorney will usually provide the client with a corporate book where corporate bylaws, corporate minutes of shareholder and board of directors meetings, corporate resolutions, stock certificates, and other appropriate documents should be kept.

Often, the attorney will go over the bylaws and explain to the client that a meeting of the stockholders and the board of directors must be held (even if there is only one shareholder). It is at this meeting that the bylaws and corporate banking resolution can be approved by the board of directors, and minutes of the organizational meetings can be finalized and shares issued. The financial planner should ensure the minutes address the adoption of a qualified defined contribution plan that permits rollovers. 

During the meeting, the planner should reemphasize to the client the necessity of not only the initial meeting but also annual meetings to maintain compliance with corporate laws and IRS and DOL regulations. These steps are important to prove to the IRS the intent of operating a business. Documentation should substantiate the business purpose and intent, and owners and directors’ approval thereof, in addition to providing documentation to defend against an IRS audit and lawsuit.

After the client has obtained a corporate charter, has a signed banking resolution, and obtained an EIN, the company can open a corporate checking account for the new business. The client may have to loan the corporation money to open the account, and then get reimbursed at a later date or take stock in return for the cash provided.

The accountant also usually obtains an EIN for a 401(k) participatory retirement account, where the client’s retirement funds can be rolled over. The planner should ensure there is an understanding of whom is responsible for obtaining not only the EIN number for the 401(k) plan but also the corporation, because sometimes the attorney takes care of this item and at other times the accountant performs this function. An example of a participatory savings plan (PSP) account title would be: Nuts & Bolts Corp. Inc. 401(k) PSP FBO (for the benefit of) John Jones. Each subsequent plan participant will have their own account and investments. 

As part of the process, the client becomes the first employee of the corporation. They should be advised that they need to pay themselves as an employee. In addition, the client needs to contribute, by salary deduction, to the newly established 401(k) corporate retirement plan. As the corporation hires additional employees, each employee needs to be informed of their rights to participate in the company’s 401(k) plan and invest in company stock when it is offered.

With the participatory savings plan account now open, the client can contact the broker where the retirement funds are held and request the broker roll over the retirement funds to the account in an amount predetermined by the client. Typically, this is an amount to fund the business for a number of months or the first year or two. It is recommended that the client use a trustee-to-trustee transfer rollover to avoid any issues that might arise with an indirect transfer.

At this point, the client will be an employee participant with rollover funds. The client can then use the investment option in the ROBS plan document to buy stock in the new corporation based upon a price per share, which should be determined by a professional appraiser. By the participatory 401(k) savings plan buying stock, the retirement funds are moved from the 401(k) bank account into the checking account of the new corporation. The new corporation then has the funds to operate.

The client should be reminded that it is the 401(k) retirement plan—through its ownership of the corporate stock—that is the corporate shareholder. The client may, however, purchase stock at the same price the 401(k) paid, and oftentimes, take stock for paying the initial organization and start-up costs.

An integral part of a ROBS is the corporation’s new qualified retirement plan, usually a 401(k) profit-sharing plan. Treasury Regulation 1.401-1(a)(2) states that a qualified plan “must be a definite, written program communicated to employees.” An adoption agreement (usually provided by the attorney) for the corporation’s 401(k) profit-sharing retirement plan describes the plan, benefits, and distribution options, and provides the eligibility requirements for participation.

The client usually serves as the employer’s plan administrator and has the duty to inform its current and future employees about the plan. The client/employer also has to deal with the administration of the plan once employees become eligible to and/or participate in the plan. The administrator must maintain accurate records of employee notification regarding the opportunity to contribute to the plan (even if the employee declines to participate) and/or make subsequent contributions to the plan.

Once employees begin participating in the corporation’s plan, a broker is usually contacted to advise each participant of their investment options in their plan; however, it is possible for a financial planner to act in this role. Advice should include information about investing in the employer’s stock if it is available or becomes available in the future.

After employees begin making salary deferrals, annual testing for discrimination in favor of HCEs and average contribution percentage (ACP) and actual deferral percentage (ADP) tests should also be conducted. The client should be advised of these annual tests to ensure nondiscrimination in favor of HCEs. The client is also responsible for meeting multiple filing deadlines, including quarterly/annual payroll reports, a federal corporate tax return, a state tax return, sales and property tax filings (if applicable), and an annual DOL Form 5500 or 5500-EZ.

How Planners Can Help Their Clients

Typically, clients who decide to use their retirement rollover funds to finance a business are not experienced in financial planning strategies. They often do not have a great deal of accounting knowledge and may not have a business background. Therefore, their financial planner may need to assist the client in finding a competent accountant. Clients will need an accountant’s help to not only set up their business accounting records correctly after the funds have been rolled into the corporation and used to purchase corporate stock, but also to help the client comply with IRS and DOL filing requirements.

A financial planner familiar with the ROBS arrangement can help the client avoid regulatory and tax compliance issues by performing an annual compliance audit on the corporation and 401(k) plan. It is important to note, however, that financial planners who undertake this task assume an additional risk if they fail to detect lack of compliance and sign off on the ROBS. Questions a financial planner should ask include:

  • Did the corporation hold an annual shareholder and board of directors meeting, and were minutes taken?
  • Were employees advised of their rights to not only participate in the plan, but to also roll over existing retirement funds into the 401(k)?
  • Have all required IRS and DOL filings been completed, and if not, are these forms scheduled to be completed?

In addition, the planner should advise the client both orally and in writing that:

The fee paid to advisers (typically, the person who helped the client with the corporate and qualified retirement plan documentation) cannot be paid from the ROBS corporation’s funds. The IRS considers these promoter fees, and payment of promoter fees from the plan assets is considered a prohibited transaction by the IRS. The promoter fee can be reimbursed to the client in the form of the new corporation’s stock issued to them personally.

They need to maintain accounting records. Their accountant can assist them with the appropriate steps necessary to establish company records. Clients may also need help with setting up payroll and payroll retirement contributions and the subsequent filing of payroll reports. The financial planner should verify the recording of the issuance of corporate stock to the retirement plan and the individual who receives stock for the payment of the promoter fee. 

Clients/employees need to pay themselves a paycheck and contribute by salary deferral to the new corporate retirement plan. This ensures the retirement plan will have at least one participant and will be considered an “active” plan.

New employees are to be notified that they can use retirement funds from prior employment to purchase corporate stock in a rollover. The client also must notify new employees about the corporation’s retirement plan when they are hired and the eligibility requirements to participate in the plan.

No personal use of funds. Once the client rolls over their retirement funds into the corporation’s retirement plan, and the retirement plan subsequently purchases corporate stock, the funds are no longer the client’s personal funds. The rollover assets become a corporate asset. Thus, clients cannot use these rollover funds to purchase personal, non-business assets.

A federal corporate tax return needs to be filed annually. This return must be filed before the client’s individual tax return; namely a Form 1120 for the C-corporation, which is due two and a half months after the tax year ends (March 15th for calendar year corporations).4 Depending on the type of business, the client may also have sales tax, property tax, and state income tax returns that now need to be filed.

File an annual Form 5500 or 5500-EZ DOL report. This must be filed electronically by the last day of the seventh month following the close of the plan year (July 31 for calendar year corporations).5 Penalties for not filing this annual form are significant: $1,100 per day, up to a maximum of $15,000. The annual Form 5500 contains a financial statement for the plan, whereby the client, as the plan administrator, reports the current value of the plan’s assets.6 The value of the plan’s assets is to be determined by the plan administrator using a consistent method of valuation from year to year.7 Although not required by either the DOL or IRS, it is recommended that clients obtain an appraisal annually by a qualified appraiser to avoid any valuation issues upon examination.


Using retirement rollover funds to finance a new business is oftentimes the only way an entrepreneur can acquire access to substantial funding. If clients roll over their retirement funds into a ROBS, they can gain access to funds in a timely manner, without worrying about loan repayments or using personal assets to guarantee business loans.

However, clients who are interested in a ROBS should be made aware of the heightened level of procedural compliance and the costs associated with this technique. Costs includes fees for attorneys, planners, accountants, and in some cases, promoter fees. Combined, startup fees start at $5,000. In addition, the costs associated with maintaining appropriate accounting records, annual filings of tax returns, annual plan appraisals, and the DOL Form 5500 can cost several thousand dollars each year.

While there are stories of entrepreneurs who have successfully used a ROBS to start a new business or to buy an existing business, there are also ROBS that have failed, leaving the client little, if anything, in their retirement account. Therefore, financial planners should emphasize to their clients in the strongest terms that they are using their retirement funds in a risky manner. As Ed Slott noted, “The IRS is continuing its scrutiny of ROBS arrangements, so advisers should warn clients away.”8

Financial planners can be a valuable member of a client’s ROBS advisory team by providing the client with a detailed cost and benefits analysis, along with an initial and annual procedural and compliance schedule. These planning actions can help clients deal with the issues raised earlier, and help ensure that future business decisions have undergone adequate business analysis, that the business plan is realistic with a good possibility for success, and that the plan is in compliance with IRS rules.

It is important to keep the following IRS statement in mind: 

Please be advised that as long as your qualified retirement plan and related trust are in existence, certain plan administration actions need to be taken in order to keep your plan qualified. These actions include ensuring that the plan is in compliance with all of the plan qualification requirements of Internal Revenue Code section 401(a) and all related Regulations. These actions are necessary until the plan is terminated and all trust assets are distributed. In addition, upon plan termination a final Form 5500—Annual Return/Report of Employee Benefit Plan—must be filed. This is required even if you were exempt from filing a Form 5500-EZ in previous years.9

As with any complex tax plan, the financial planner, and all other advisers, should provide clients with an engagement letter setting out what the planner is responsible for and clearly delineating the client’s responsibilities coupled with adequate warnings for failure of the client to comply with both ERISA and IRS rules. 


  1. See “Guidelines Regarding Rollovers as Business Startups” at
  2. Plan assets are precluded from attribution to plan participants under IRC Sec. 318(a)(2)(B)(i).
  3. It is important to note that a ROBS only works with a C-corporation. The process will not work with an LLC or other form of business ownership.
  4. Section 6012(a)(2); Reg. 1.6012-2(a)(3).
  5. Reg. 301.6058-1(a)(4); instructions for Form 5500.
  6. ERISA Section 103(b).
  7. Revenue Ruling 80-155.
  8. See “Dangers in Using IRAs for Business Startups,” in the September 26, 2010 edition of InvestmentNews.
  9. See the “ROBS Project Summary,” by the Employee Plans Compliance Unit at (last reviewed or updated
    by the IRS: February 22, 2013).


Hopson, Patricia D. and James F. Hopson. “Financing a Business Startup or Acquisition Using Rollover Funds.” Journal of Financial Planning 27 (6); 52–60.

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