The IRS is warning businesses to watch out for Employee Stock Ownership Plan (ESOP) compliance issues. ESOPs are complex arrangements that enable employees to purchase company stock. But they can also be abused, and some high-income individuals have been known to use them to hide earnings and evade taxes. The IRS says it has discovered valuation issues with employee stock and the allocation of shares to disqualified persons. In the past, the tax agency didn’t have the budget to investigate these kinds of abuses. But the Inflation Reduction Act has provided funding so the IRS can aggressively pursue wealthy tax cheats and crack down on the financial tools they misuse. Contact us with questions. © 2023
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