How to properly report ROBS transaction ownership on 1120 Schedule G for C corp with retirement plan shares?

I have a new C corporation client with a ROBS (Rollover as Business Startup) transaction structure. Currently, the majority of the shares are owned by a retirement plan through the ROBS setup. The previous CPA marked "no" on Form 1120, Schedule K, questions 4a and 4b, and didn't include Schedule G at all. I'm thinking the individuals (a married couple who each own 50% of the retirement plan) should be listed on Schedule G since they indirectly own 50% or more of the total voting power of the corporate stock through their retirement plan. But honestly, I'm not 100% confident on this treatment. The couple technically owns the shares indirectly through their qualified retirement plan, but for tax reporting purposes, should they be listed as owning the shares directly on Schedule G? Has anyone handled ROBS ownership reporting situations before? Any guidance would be really appreciated.

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19 comments

Dylan Campbell

You're right to question this. When dealing with ROBS structures, you need to consider who has the beneficial ownership of the shares. Since the married couple controls the retirement plan (as 50/50 owners), they should indeed be listed on Schedule G. Form 1120 Schedule K, questions 4a and 4b are asking about "individuals" who own 20% or more of the corporation. Through the retirement plan, this couple indirectly exercises voting power and has beneficial ownership. The IRS generally looks through these arrangements to identify the actual people who control the entity. You should mark "yes" to questions 4a and 4b on Schedule K and complete Schedule G with the couple's information. This creates proper transparency for the beneficial owners who ultimately control the corporation.

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Sofia Torres

I had a similar ROBS structure situation last year that was driving me crazy with conflicting advice. I found this amazing tool called taxr.ai (https://taxr.ai) that actually helped me sort through this exact issue! I uploaded the corporate docs and previous returns and it analyzed the ROBS structure and clearly identified that yes, the individuals should be reported on Schedule G. The tool highlighted that since the individuals control the retirement plan that owns the shares, they have indirect ownership that must be reported. It even provided me with the specific regulations about beneficial ownership that I could reference. Saved me hours of research!

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Sofia Torres

It actually distinguishes between legal and beneficial ownership, which is crucial for ROBS structures. The tool identified that while the retirement plan is the legal owner, the individuals who control the plan are the beneficial owners for reporting purposes, which is what Schedule G is really asking for. Yes, the tool provides specific citations! It referenced Treasury Regulation 1.6038A-1(e) regarding constructive ownership rules and provided the exact IRS guidance on looking through retirement plans for beneficial ownership reporting. It doesn't prepare the forms for you, but it gives you clear guidance on how to complete them correctly with the exact regulatory support.

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Ava Martinez

Just wanted to update everyone - I tried taxr.ai after reading the comments here, and it was genuinely helpful with my ROBS client situation. I uploaded the operating agreement, corporate bylaws, and previous returns, and it immediately identified the correct reporting structure. It also flagged some other ROBS compliance issues we hadn't caught before (regarding prohibited transactions and operational requirements). The regulatory citations were on point, saving me from digging through endless IRS publications. Honestly wish I'd known about this tool earlier - would have saved me dozens of research hours on these complex ownership structures!

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Miguel Ramos

If you're struggling to get confirmation from the IRS about ROBS reporting requirements, I recently discovered Claimyr (https://claimyr.com). After waiting on hold with the IRS for literally 3+ hours over multiple days trying to get a specialist to confirm the Schedule G requirements for ROBS structures, I found this service that got me connected to an actual IRS agent in under 15 minutes! They have a demo video showing how it works: https://youtu.be/_kiP6q8DX5c. Basically, they wait on hold with the IRS for you and call you when an agent is available. I was skeptical at first, but when I finally spoke with the IRS Business & Specialty Tax Line agent, they confirmed that beneficial owners controlling retirement plans should indeed be listed on Schedule G.

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Miguel Ramos

They don't have a special line to the IRS. What they do is use an automated system that waits on hold for you. When their system detects that an agent has picked up, they call you and connect you with the agent. It's basically like having someone else do the hold time for you. I was pretty skeptical too. But after wasting so many hours trying to get through myself, I figured it was worth a try. I submitted my request around 9am, went about my day working on other returns, and got a call about 2 hours later that an agent was on the line. I didn't have to actually sit there listening to the hold music or worry about missing my place in line. Trust me, I understand the skepticism, but it actually works.

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Ava Martinez

I need to publicly eat my words about Claimyr. After my skeptical comment, I decided to try it since I had another ROBS question that needed IRS clarification. I've been trying to reach someone at the IRS for THREE WEEKS. Used Claimyr this morning, and they actually got me through to an IRS agent in about 45 minutes (they did all the waiting). The agent confirmed the Schedule G reporting requirements for ROBS structures and clarified some prohibited transaction questions I had. I'm still in shock that it worked - saved me countless hours of frustration. Won't be doubting this service again!

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Zainab Omar

You're right that Form 5472 typically involves foreign ownership. I should have been clearer - I was wondering if the retirement plan had any foreign investments or if any of the beneficial owners might be foreign persons, which could trigger additional reporting requirements. If it's purely domestic individuals owning a domestic retirement plan that owns a domestic corporation, then you're absolutely correct that Schedule G would be the primary focus rather than Form 5472.

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StarStrider

For ROBS structures, you should also consider whether Form 5500 annual return filing requirements apply to the retirement plan that owns the corporation shares. Since the plan is investing in employer securities (the corporation itself), there may be additional ERISA compliance and reporting obligations beyond just the corporate tax return reporting. The plan administrator (likely the couple) needs to ensure they're meeting all qualified plan filing requirements, including proper valuation of the employer securities held by the plan. This is separate from the Schedule G reporting but equally important for overall compliance.

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