"One of the most troubling [IRS] rulings on employee stock ownership plans (ESOPs) has been reversed. Under the old rules, if an ESOP sold unallocated shares, any amounts left over from the sale proceeds after the debt on those shares had been paid could be allocated to employee accounts. However, these allocations would count as 'annual additions' and could not exceed the section 415 limits that restrict individual allocations to not more than 25% of pay (including allocations from other plan contributions).... In [a] technical assistance memorandum whose release data was not available at this writing, the IRS ... ruled that the excess amounts from the sale should be treated as earnings, and thus not be subject to the 415 limits."  MORE >>