Sorensen Consulted for GAO Report on Self-Directed IRA's: Report Concludes IRS Lacking in Key Areas

PHOENIX - Jan. 17, 2017 - PRLog -- Over one year of investigation was involved in the recently-released GAO report, Retirement Security: Improved Guidance Could Help Account Owners Understand the Risks of Investing in Unconventional Assets¹. Senate Finance Committee ranking member Sen. Ron Wyden (D – OR) tasked the GAO with the investigation.

As a part of their report, the GAO interviewed attorney, author, and SDIRA expert, Mat Sorensen, and also referred to his keystone book, The Self-Directed IRA Handbook: An Authoritative Guide for Self-Directed Retirement Plan Investors and Their Advisors².

The GAO identified 27 custodians who handle self-directed IRA's holding unconventional assets; 17 participated reporting over 500,000 held retirement accounts and $50B in unconventional investment assets. "The need for guidance has been growing over the past decade as the self-directed IRA industry has tripled during this time," said Sorensen. Self-directed IRA's are accounts that may be invested in unconventional assets, which typically include: Real estate, precious metals, private equity, virtual currency, etc. The report concludes that IRS guidance is lacking in three key areas: Prohibited Transactions, UBTI (Unrelated Business Taxable Income), and Fair Market Valuations.

"The GAO report was an excellent analysis and summary of the common issues facing self-directed IRA and 401(k) owners investing in unconventional assets," said Sorensen. He added, "As an attorney representing self-directed account holders for over ten years, I wholeheartedly agree with the three issues the GAO cited in their report, and believe that further guidance from the IRS would increase awareness for not only account holders, but also for their professional tax, legal, and financial advisors. Most of these professionals are totally unaware of the tax and legal issues involved, and tend to talk their clients out of it simply because they don't know how to do it properly."

The IRS agreed with the GAO's findings and stated that, "We agree that current IRS guidance can provide more information to help IRA owners understand their roles and responsibilities."

About Mat Sorensen

Mat Sorensen is an attorney, best-selling author, and self-directed retirement plan expert. Mat is a Partner of law firm Kyler, Kohler, Ostermiller & Sorensen, LLP, located in Arizona, California, and Utah. In 2014, Mat released The Self-Directed IRA Handbook, an Amazon Best-Seller and the most widely used and referenced book in the self-directed industry. Mat routinely speaks to and on behalf of the industry at-large, including his annual Self-Directed IRA Summit³. When away from work, Mat spends his time with his wife and three daughters, racing bikes, and investing in real estate.

¹ http://www.gao.gov/products/GAO-17-102

² http://sdirahandbook.com/products/buy-the-sdira-handbook/

³ http://www.sdirasummit.com/