In PLR 200709011 and PLR 20079012, the IRS ruled that the transfer of qualified replacement property (in the context of a Section 1042 ESOP transaction) to a grantor retained annuity trust (GRAT) does not constitute a disposition of the QRP.
At the recent 2007 Great Place to Work conference, Google Director of HR Laszlo Bock reported that the company had one million job applications last year. Google was the top company on the Best 100 Companies to Work For® list.
Maybe employee ownership is catching on, at least as a way to help finance troubled companies. Financier Kirk Kerkorian has proposed sharing ownership with union workers at Chrysler in return for their agreeing to changes in health care costs. The UAW did not respond.
Robert Willens, the ubiquitously quoted tax analyst at Lehman Brothers, told the Wall Street Journal on April 9 that ESOP S corporations would be the "wave of the future" in merger and acquisition transactions.
The new regulations for deferred compensation taxation have been issued-all 400 pages of them. For equity compensation plans, the rules are basically the same, but they allow companies to give departed employees more time to exercise options without triggering the tax.
The Certified Equity Professional Institute (CEPI) has released the second installment of its research study on risks and controls for equity compensation, specifically addressing exercise processes, taxes and payroll issues, and accounting issues.
In the last update, we incorrectly identified California as not following the federal exemption for income taxes for ESOP S corporations. In fact, California does do this, but it also levies an income tax/franchise tax at the corporate level (but not the individual level).
Last year, the Presidential Panel on Federal Tax Reform proposed sweeping changes in retirement plan tax benefits. While the proposal did not specifically mention ESOPs, it appeared to eliminate all existing defined contribution plans and replace them with an Employer Retirement Savings Account.
The IRS has issued a very useful compilation of requirements and procedures for correction programs when a qualified plan fails to abide by plan or ERISA requirements. The material is easy to navigate and provides considerable detail on each of the available correction programs.
The District of Columbia, Louisiana, Michigan, New Hampshire, New Jersey, New York (and New York City), and Tennessee do not provide the same exemption from income tax for S corporation earnings attributable to an ESOP as does federal tax law.
