IRA Financial Promotes Retirement-Funded Business Purchases

IRA Financial is promoting a Rollover as Business Startups (ROBS) arrangement that lets entrepreneurs use eligible retirement funds to finance the purchase of an existing business without taking a taxable withdrawal or incurring an early-withdrawal penalty. The process described involves forming a C corporation with its own 401(k) plan, rolling eligible funds into the plan, and having the plan buy company stock; the corporation then uses the proceeds to acquire the business. The company says its service includes in-house tax attorneys and IRS audit protection. The arrangement has requirements and limits: buyers must work in the business, the plan must file annual Form 5500 reports, and Roth IRAs are ineligible.