"Members of the Florida legislature recently proposed a change to the state's stamp tax law that would specifically exclude its application to participant loans from ERISA-covered retirement plans ... Among the consequences of the failure to comply with Florida's stamp tax is that the loan is unenforceable in Florida state courts. Therefore, the failure to pay the stamp tax on a participant loan may result in a prohibited transaction and/or tax qualification failure, as well as a deemed distribution due to the potential inability of the plan to enforce its rights in court in the event of a default, in violation of the enforceable agreement requirement articulated in applicable IRS regulations."

MORE >>