Form 5500

[DPSRich]

Small closely held S-Corp has an ESOP plan. Common stock of plan sponsor is not publically traded.

What is the tax consequence of answering “NO” to question #12 on Schedule R-Form 5500, “Does ESOP hold stock not readily tradable on established securities market?”

Thank you.

DPSRich

[ESOP Guy]

I try and avoid answering a question with a question. But since no one has answered I am going to do so.

What are you trying to figure out? I am just not sure I understand you question.

[DPSRich]

I try and avoid answering a question with a question. But since no one has answered I am going to do so.

What are you trying to figure out? I am just not sure I understand you question.

What will happen if I answer no on Schedule R?

Have you ever answered no for a non publically held company and it produced an audit.

[A Shot in the Dark]

In my mind, question 3D and 4G on the Schedule I go hand in hand with the question you speak of, Section IV Question 12 on the Schedule R. As a whole, I believe the IRS and DOL are attempting to asertain the number of ESOP's that hold non publicly traded stock, along with determining whether or not an Independent Appraisal has been obtained.

When you speak of tax consequence, I do not understand your question. It seems to me that answering a question no that clearly should be answered yes would put the signer of the IRS Form 5500 in jeopardy of filing a return that is true, correct and complete.

Dale

[ESOP Guy]

When you speak of tax consequence, I do not understand your question. It seems to me that answering a question no that clearly should be answered yes would put the signer of the IRS Form 5500 in jeopardy of filing a return that is true, correct and complete.

Dale

Dale you are being kind. There is a perjury statement with the signing of the Form 5500, and by knowingly answering a question wrong is perjury.

I would add I agree with Dale on everything else he said.