Finance Quick Answers
Does the IRS review IRAs?
Have you seen ads for IRS-Approved IRA investments? If so, beware. The government says these ads are misleading. Why? Simply because the IRS does not approve investments for IRAs. Fraudulent promoters are trying to take advantage of consumers who may be confused about the role of the IRS when it comes to IRAs. The IRS does not:
- review or approve investments;
- advise people on how to invest their IRAs
- endorse any investments; or
- issue statements that an investment in an IRA is protected because the IRS has approved a particular trustee or custodian.
So before you invest, check with your state securities regulator to make sure the investment and person selling it are registered. You can find the phone number for your state securities regulator in the blue pages of the phone book or contact the Federal Trade Commission.
Source: Consumer Alert: "Taxpayers with IRAs: FYI The IRS Does NOT Approve IRA Investments," August 1998.
Sandra McKinnon, Consumer & Family Economics Specialist, University of Missouri Extension
Cynthia E. Crawford, Ph.D., Consumer & Family Economics Specialist, University of Missouri Extension
Last update: Monday, July 28, 2008