My husband and I were told we could form a c corporation and roll our retirement over into it without being

Question

penalized for drawing it out before we we are 59 1/2. The company that told us about it calls it a versatile entrepreneur retirement savings account plan. They said it is legal and takes the employee retirement income security act (ERISA) and the Internal revenue Code of 1986 (IRC) into consideration. In calling around checking prices to have something like this done we were told that it is illegal to invest your retirement into a business that you will be working in. They said there was someone in Little Rock Arkansas that was doing it and that the IRS was going after them and the people who took part in it with them. Does anyone know the truth about this and how to go about getting it done if it is legal? Also we have found a business where the owner told us if we bought it we could transfer the corporation they set up for the business into our names....Is this possible and whats involved in it? Any help would be greatly appreciated

Answer 1

Never heard of this but the IRS isn't stupid.  I'd suggest not trying to scam them.

Answer 2

IRS has ruled that is a tax scam.

I sould illegal to me.  IRS takes tax evasion very very seriously.

I have a self directed IRA.  I can write checks to buy property and I can even own a business.  But I cannot work in the  business nor draw any money.  I formed an LLC to do this.  Eventually all this money goes back to the IRA and I have to pay taxes like everyone else.

I cannot take anything early wo a penalty.

Your guy sounds like a scam or ripoff.