IRS Clarifies When Valuations Are Needed for Thinly Traded ESOP Companies

In Notice 2011-19, "Definition of 'Readily Tradable' on an Established Security Market," the IRS has put into regulations the long-held assumption that companies are considered privately held unless their stock is readily tradable on an established security market. Pink sheet stock companies, therefore, would need an appraisal for their ESOP.