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The ROBS transaction and Personal Guarantees

May 16, 2013

A recent IRS tax court decision issued on May 9, 2013, re-affirms the importance of meeting all legal requirements related to the investment of retirement monies, including 401(k) monies in a company, including a C-Corporation.

The cautionary tale of this decision is that plan participants and company owners may need to avoid offering personal guarantees in exchange for business funding and financing.  We have helped many companies, implement a 401(k) Plan, wanting to use their retirement monies to fund a new business, while being especially diligent in arranging one or more financing options for the new business.   Additional information can be found at http://ustaxcourt.gov/InOpHistoric/PeekandFleck.TC.WPD.pdf & http://benefitsnotes.com/2013/05/be-careful-if-robs-is-your-business-financing-strategy/

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