Benetrends CEO weighs in, supporting retirement rollovers
To the editor:
Regarding your March article, “Warning Shots: Tax court takes aim at retirement rollovers as funding tools,” we believe the article unfairly categorizes Rollover Business Startups (ROBS) and consequently confuses your readers by using the ROBS term as a catch-all phrase for using retirement funds to buy a franchise.
In fact, the two recent U.S. Tax Court cases, Peek v. Commissioner and Ellis v. Commissioner that are the basis for your story, actually challenge the legality of self-directed IRA transactions and not ROBS.
While the cases represent significant developments in the tax laws applicable to IRAs, the cases should not adversely affect typical ROBS arrangements, which are subject to different regulatory requirements including the applicability of the Employment Retirement Income Security Act Section 408(3).
In contrast to some of the points made in the article, retirement planning and ROBS arrangements are extremely focused fields and completely different from self-directed IRA transactions. That is why our firm has developed a highly specialized practice focused on providing clear and defined paths toward franchise development that is in full compliance with the law, the IRS and the Department of Labor.
President and CEO