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Last Update:
27-May-2013


 

the Law:

The Internal Revenue Codes permitting these transactions go back prior to 1954. They were reorganized and expanded with the passage of the Employees Retirement Income Security Act (ERSIA) of 1974. 1978 saw the codification of Salary Deferrals [401(k) plans]. The growth of the stock market during the 1990s and the extension of individual participant investment control of 401(k) accounts led to a burgeoning desire for these plans.

The following links are to the pertinent parts of the Internal Revenue Code and ERISA. In 1974, Congress took the "prohibited transactions" sections from the 1954 Code and moved it to Section 4975. Congress wrote a parallel but not identical "prohibited transactions" section and placed it in the Labor Code, what we refer to as ERISA today, and they cross refer.

Internal Reveune Code ERISA

Prohibited Transactions

Prohibited Transactions

§ 503 [pre-1974]

[nothing comparable]

§ 4975(d)(13) [1974-on]

§ 406, 407 & 408 [1974-on]

§ 4975(e)(2)(H)

 

§ 4975(f)(6)

§ 408(d)

   

Unrelated Business Taxable Iincome

Trustees and Valuations

§ 513(b)

Dovovan v. Cunningham

   

No Commissions, Kickbacks or Fees

Title 18 USC 1954

 


IRS Guidance:

The IRS publishes its thinking on various topics on its website, usually in .pdf or .html form. We have in the past provided IRS's links to these pertinent documents, but the IRS keeps moving them. These links are to copies of the original IRS files on oursite, but we encourage you to search for them on the IRS.gov site if you wish.

IRM — Valuations

October 1, 2008 Memo

IRS Fall 2011 Robs Newsletter [Apr/2013 version]

IRS Fall 2011 Robs Newsletter [Annotated by ERSOP.com]