Ezel / IRS Rulings / 201048035

CCA 201048035: ESOP valuation rules require annual valuation and an independent appraiser

Number
201048035
Outcome
Advice
Document type
Chief Counsel Advice
IRS subject
Statutory Exemptions
Topics
Excise taxes
Code sections
§ 4975
Ruling dated
July 29, 2010
Publicly released
December 3, 2010
Source
View Official PDF

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This page covers legal advice the IRS Office of Chief Counsel wrote for IRS staff, issued in 2010, which can't be cited as precedent. Ask about your situation and see what the current Code and IRS guidance say, with citations.

Currency note: this determination was released in 2010
Statutory amendments, regulation changes, court decisions, or later IRS guidance may have changed the analysis since then. Treat this page as historical context, not current tax advice. Verify current law before relying on any specific rule, threshold, or position mentioned here.
Not precedent. Under 26 U.S.C. § 6110(k)(3), this written determination may not be used or cited as precedent. It is advice from the IRS Office of Chief Counsel to IRS personnel on the facts they presented, and identifying details were redacted by the IRS before release. The official IRS release (linked on this page as a PDF) is the authoritative source.
About this page: The plain-English summary and ruling snapshot below were written by Ezel based on the official IRS release. The full text is the IRS's own document.
View official IRS release (PDF)

Plain-English summary

The IRS advised that Treasury Regulation § 54.4975-11(d)(5) is a useful provision to cite regarding the issue discussed in the email. The regulation imposes an annual valuation requirement on employee stock ownership plans and requires an independent appraiser. The advice distinguished this provision from relying only on a 1980 revenue ruling.

Ruling snapshot

  • Question: What authority supports the annual valuation and independent-appraiser requirements for ESOPs?
  • Outcome: advice given
  • Key authorities: Treas. Reg. § 54.4975-11(d)(5).

Full text (IRS public release)

ID: CCA-729100-10 Number: 201048035
Release Date: 12/3/2010
Office: -------------------------
UILC: 4975.04-00

From: ---------------
Sent: Thursday 7/29/2010 10:02 AM
To: -------------------------
Cc: ----------------------------
Subject: [--------] ---------
sorry for the delay in responding as I was out of the office on Tuesday. ----------------------------------- ---------------------------------------------------------- I might also point out that Treas. Reg. Sec. 54.4975-11(d)(5) would also be a good provision to cite in connection with this issue (rather than just the 1980 rev rul) as it imposes an annual valuation requirement on all ESOPs (both leveraged and nonleveraged) in addition to the need for an independent appraiser.

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