§656
34 cases·2 followed·32 cited—6% support
Statute Text — 26 U.S.C. §656
Statute text not available for this section.
34 Citing Cases
in 2001 to require that income or loss that had previously been allocable to the ESOP be attributable to certain non-ESOP shareholders of a closely held corporation. See Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107-16, § 656, 115 Stat. 38, 131–35. But Congress made the change prospectively and did not generally apply it to plan years before 2005 for an ESOP (as in the instant case) that existed before 2001. See id. subsec. (d). Shareholders of an S corporation could
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
at 131-135. Any such prohibited allocation would result in an excise tax to the ESOP and income recognition to the persons deemed to own at least 50% of the shares ofstock in the S corporation. In amending section 409(p), Congress recognized that "the income ofan S corporation allocable to an ESOP * * * [was] not subject to curr
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
656(d)(1), 115 Stat. at 135 (codified as section 409(p)); Rev. Rul. 2003-6, 2003-1 C.B. 286.8 He accordingly advised that the existing ESOPs should be phased out and that new ESOPs would need to have more than 10 participants. On the basis ofMr. Ryder's advice the principals formed and elected S stat- us for a new company, Water Speciality Gro
at 131; see also H.R. Rept. No. 107-84, at 274 (2001), 2001 U.S.C.C.A.N. 46, 200. There are significant tax consequences when an ESOP violates the section 409(p) requirements. For one, an excise tax equal to 50% ofthe total prohibited allocation is imposed. Sec. 4979A. Furthermore, the ESOP will not satisfythe requirements ofsec
Section 656 ofthe EGTRRA, inter alia, (1) added to the Code (a) section 4979A(a)(3), which imposes an excise tax upon, inter alia, the occurrence ofa "nonallocation year described in subsection (e)(2)(C) with respect to an employee stock ownership plan", (b) section 4979A(e)(2)(C), which provides that "the amount involved for the first nonallocatio
Section 656 of the EGTRRA, inter alia, (1) added to the Code (a) section 4979A(a)(3), which imposes an excise tax upon, inter alia, the occurrence of a “nonallocation year described in subsection (e)(2)(C) with respect to an employee stock ownership plan”, (b) section 4979A(e)(2)(C), which provides that “the amount involved for the first nonallocat
at 131; see also H.R. Rept. No. 107-51 (Part 1), at 100 (2001) ("[T]ax deferral opportunities provided by an S corporation ESOP should be limited to those situations in which there is broad-based employee coverage under the ESOP and the ESOP benefits rank-and-file employees as well as highly compensated employees".). . Under new
at 131; see also H.R. Rept. No. 107-51 (Part 1), at 100 (2001) ("[T]ax deferral opportunities provided by an S corporation ESOP should be limited to those situations in which there is broad-based employee coverage under the ESOP and the ESOP benefits rank-and-file employees as well as highly compensated employees".). . Under new
656, 1 count of money laundering in violation of 18 U.S.C. secs. 1957 and 2, and 3 counts of filing false tax 2 Among the classes that petitioner took were: Year Class Hours 1988 Corporate Tax II 45 Advanced Accounting 45 Audit 45 Practice 48 Audit 48 Theory 48 Law 48 1991 CPA Exam: Practice I 15 CPA Exam: Practice II 15 CPA Exam: Theory 15 CA