What settlement terms will the taxpayer be expected to agree to if some cash or property payments were made to the Management S Corporation by the operating business?
A.6. If some cash or property payments were made by the operating business to the Management S Corporation, then the taxpayer must agree to the following settlement terms: 1. To the extent payables were accrued by the operating business, but were never paid to the Management S Corporation, the terms described under A-5, above, apply. 2. If cash or property was paid by the operating business to the Management S Corporation in years prior to the first IRC Section 6501(a) open year, the amount of all cash or property held by the Management S Corporation or ESOP, or rolled over from the ESOP to an IRA or other qualified plan during such years, as of the first day of the first IRC Section 6501(a) open year is includible in the income of the participants in the ESOP in that first IRC Section 6501(a) open year in proportion to their interests under the ESOP or, if the documentation is insufficient to establish the proportion of their interests, in the proportion specified in the closing agree
