What is a QRP? What is the QRP?

QRP & eQRP® have generated incredible excitement and interest within the self-directed investor community – from crypto-enthusiasts and gold & silver precious metals investors to real estate syndicators. But, there appears to be extensive misunderstanding of QRPs, so we’re here to set the record straight for you and all investors that want total financial control. For expert analysis, review, and FAQ about QRP, QRP-LLC, Solo QRP, Solo 401k & SDIRA, read on.

What does QRP stand for? What is a Qualified Retirement Plan?

  • QRP stands for Qualified Retirement Plan.
  • A QRP, or Qualified Retirement Plan, is a retirement plan that is tax-favored under Section 401 of the Internal Revenue Code, also referred to as the Tax Code or the IRS Code. The title of the Section is: Qualified pension, profit-sharing, and stock bonus plans.
  • Some of the most powerful tax strategies exist within this section of the tax code, which covers many types of tax-sheltered QRP plans.
  • 401(k) plans, defined benefit plans, cash balance plans, profit-sharing plans and pension plans that meet the requirements of the tax code are all types of QRPs.

Who is eligible for a QRP?

  • A QRP can be sponsored or created by:
    • an employer for the exclusive benefit of his employees or
    • by a self-employed individual.
  • If there’s no employer or self-employment, the retirement plan is not a QRP or Qualified Retirement Plan.
  • A retirement plan that is not “qualified” in the eyes of the IRS does not provide any tax benefits or tax sheltering, even if the plan documents say “QRP,” “401k,” “Solo 401k,” “Qualified Retirement Plan, “EQRP®,” “eQRP ®”* or words of similar import.
  • Rolling-over funds from a Self-Directed IRA to a “QRP” that’s not actually a Qualified Retirement Plan in the eyes of the IRS may result in substantial taxes and penalties, which greatly exceed any purported UDFI benefit of a QRP over an SDIRA.
  • The definition of self-employment for QRP purposes, as outlined in Section 401 of the Tax Code and the Code of Federal Regulations there-under,  is tied to earned income from a trade or business.
  • The IRS and tax courts have put forth extensive parameters  to define what counts as earned income from a trade or business. This is a technical and legal tax question that must be addressed when establishing a QRP.
  • We consistently encounter erroneous and questionable positions put forth by QRP promoters.
  • For a helpful and educational video about this QRP & SDIRA topic, click here.

At ReSure we don’t promote or sell; we aim to assist you with integrity and educational resources of the highest quality, whether you’re establishing a Checkbook QRP, Checkbook IRA, or Checkbook 401k. Because we create every self-directed structure available – Checkbook IRA, Checkbook QRP, and Checkbook 401k accounts – we can be impartial and are free of bias.

QRP vs. SDIRA: Is a QRP better than a Self-Directed IRA?

  • A QRP is better than a Self-Directed IRA, or SDIRA, for those that meet the IRS guidelines for creating and funding a QRP.  
  • However, for businesses that have full-time employees, operating a QRP costs a lot more than operating an SDIRA.
  • A QRP is not better than an SDIRA for those that IRS rules won’t allow use of a QRP.

QRP vs. Self-Directed IRA: What are some QRP features not available to an SDIRA?

A QRP has the following features, making a QRP more attractive than a self-directed IRA – for those that qualify:

  • Much higher contribution limits. For example, 401k contribution limits are about $60,000 – far higher than IRA contribution limits.
  • No financial institution custodian is required for a QRP. In contrast, an SDIRA must have a financial institution custodian.
  • (For our SDIRA clients, we set up Checkbook IRAs – IRA-LLCs & IRA-Owned Trusts – to marginalize the custodian and give you total checkbook control, along with enhanced asset-protection and anonymity.)
  • QRP participants can take personal loans from the plan, of up to $50,000 – to be used for any purpose.
  • Prohibited Transactions do not disqualify a QRP. Of course, QRP prohibited transactions do have adverse tax consequences and must be corrected, but those are not nearly as harsh as the repercussions of a prohibited transaction in a Self-Directed IRA.
  • Roth 401k & Traditional 401k within a single-plan, as opposed to SDIRAs that require totally separate accounts for Traditional SDIRA and Roth SIDRA.
  • QRPs do not generate UDFI from real estate acquisition indebtedness, which can be valuable to retirement account real estate investors and help them avoid UBIT taxation issues.
  • QRP participants can take a personal plan loan for up to $50,000, which is a disqualifying prohibited transaction for a self-directed IRA.

What are some drawbacks of a QRP?

A QRP, especially one that’s required to cover non-owner employees of a business, is extremely complex and costly to run. The IRS and DOL compliance requirements are incredibly complex, and if those rules are not followed it gets 10x more costly. A QRP that covers non-owner employees is an “ERISA Plan.”

QRP vs. Solo 401k: Compare Solo 401(k) to QRP

  • A Solo 401k is just a QRP that does not cover non-owner employees.
  • There are some plan providers that have simplified QRP documents for such owner-only plans, which are not compatible for a business with full-time employees, and call those a “Solo 401k Plan.”
  • Click here for an IRS Solo 401(k) definition.
  • The IRS calls a Solo 401k a “one-participant 401(k) plan,” but acknowledges that it may also be referred to as:
    • Solo 401(k)
    • Solo-k
    • Uni-k
    • One-participant k

Of course, what really determines whether a plan is a Solo QRP plan or “full QRP” is the presence or absence of non-owner employees, not the nature of the plan document.

Does a QRP provide better asset-protection than a Solo 401k?

  • A QRP that covers non-owner employees is an ERISA Plan – a plan that is subject to all the rules of the federal Employee Retirement Income Security Act of 1974.
  • ERISA federal law provides extremely powerful asset-protection of QRP assets for plans that are subject to ERISA.
  • QRPs that cover only the business owner(s) and/or their spouses are exempt from many provisions of ERISA and, therefore, don’t  have full ERISA asset-protection.
  • The asset-protection of such Solo QRP plans is still robust, but not as strong as that of an ERISA Plan. From an asset-protection perspective, they are similar to Self Directed IRAs.

Can the asset-protection features of a QRP or Self-Directed 401k be enhanced with a QRP-LLC?

Whether-or-not QRP asset-protection is enhanced by creating a QRP-owned LLC, will depend on 2 factors:

  • The jurisdiction in which the LLC is formed
  • The nature of the QRP investments

This requires knowledge of LLC nuances in all LLC domiciles, of which there are 51 in the US. Be wary of anyone that advocates for all investors to implement identical structures, as one-size-fits-all fits nobody. At ReSure, we have intimate knowledge regarding the LLC’s of all US jurisdictions and aim to provide you with services tailored to your needs.

Can you qualify for a QRP by creating an LLC to be the business sponsor of the QRP? Does such an LLC enhance QRP asset-protection?

  • An LLC is NOT a trade or business. An LLC is just a legal entity.
  • If you have business activity that meets IRS guidelines for sponsoring a QRP, you can create a QRP without an LLC.
  • If you do not have a business that meets IRS guidelines for sponsoring a QRP, creating an LLC will NOT qualify you for a QRP.

When does it make sense to establish a QRP vs an SDIRA?

  • For those qualify for a QRP by having a trade or business, and don’t have full-time employees, a QRP is clearly the preferred choice.
  • However, those that do have full-time non-owner employees must do a cost-benefit analysis to determine if the additional cost and complexity of a QRP is worthwhile, based on their objectives.
  • Operating a compliant QRP for a company that has full-time non-owner employees is extremely complex, even if the QRP does not invest in alternative assets such as real estate, gold & silver, private stock, and other “off-Wall Street” investments. It’s 10x more complicated when the QRP does invest in non-Wall Street assets.

What is an EQRP?

  • EQRP is a marketing term that has been trademarked by Total Control Financial LLC, also doing business as the eQRP Co. and the eQRP Company.
  • “EQRP” is not a retirement plan type that is recognized or approved by the IRS; “EQRP” is a marketing term. EQRP does not represent a patented process, construction or structure.
  • Click here to view an IRS list of tax-sheltered retirement plan types
  • The promoters of EQRP have referred to their “QRP” as the “Empowered Qualified Retirement Plan” and the “Enhanced Qualified Retirement Plan.”

It’s important to understand that a trademark does not represent proprietary product, knowledge, or expertise. A trademark is used to protect proprietary marketing terms, words, symbols or designs.

What does EQRP stand for? What is the meaning of EQRP?

  • EQRP stands for whatever you’d like it to or nothing at all.
  • In the past, EQRP promoters referenced Empowered Qualified Retirement Plan, or Empowered QRP.
  • More recently, EQRP promoters have been referencing Enhanced Qualified Retirement Plan, or Enhanced QRP.
  • EQRP promoters also seem to try to portray themselves a fintech company, perhaps indicating that they intended for the “e” in EQRP to be similar to the “e” in “email,” “ecommerce,” “EFIN,” “e-fax,” and many similar terms in which “e” stands for “electronic.”


There are providers of “QRP” that claim the following, among others:

  • QRP is better than a Solo 401k because “the QRP” can be used even by:
    • business-owners with full-time employees
    • those that are employees only and don’t have their own business
  • QRP provides better asset-protection than a Solo 401k
  • QRP is for everybody that would otherwise invest with a Self-Directed IRA

To our knowledge – but you should confirm this independently…

  • These providers are just selling a Self-Directed 401k Plan Document, bundled with an LLC, as a “QRP.”
  • This “QRP” plan document, which they buy from a well-known 3rd-party vendor, has the necessary language to accommodate employees, as do the documents of many Self-Directed Solo 401k vendors.

Note the following QRP facts:

  • Obtaining full ERISA asset-protection for a QRP is contingent on non-owner employee participation in the plan.
  • A QRP for which business owners are the only eligible participants is a non-ERISA plan that does not provide ERISA asset-protection, regardless of what the plan provider calls it. Such a “QRP” is a “Solo 401k.”
  • Not every type of IRA funds can be rolled into a QRP.
  • Not everyone can qualify for a QRP.
  • Operating an ERISA QRP, compliantly, may require  greater support than “the QRP company” is providing.

eQRP® vs. Solo 401k

  • An “Eqrp” is just a 401k plan document coupled with a 401k-owned LLC.
  • Therefore, if the “eQRP” is for an owner-only business, the eqrp is a Solo 401k .
  • If the eqrp is for a business that has non-owner employees, it’s a 401k plan that requires extensive administrative expertise.
  • Of course, as EQRP is just a trademark, the promoters of eqrp can start selling something else using the marketing term EQRP.

eQRP® vs. SDIRA or Self-Directed IRA

  • As an eqrp is just a 401k plan document, this is the same question as “QRP vs SDIRA” and “401k vs SDIRA” that’s addressed earlier in this post.

eQRP® vs. Checkbook IRA

  • A “Checkbook IRA” is an SDIRA-owned entity, LLC or trust, that enables SDIRA investors to exercise the same level of control as QRP investors.
  • A Checkbook IRA marginalizes the role of an SDIRA custodian, giving the SDIRA investor enhanced asset-protection, freedom, and “checkbook control” over their self-directed retirement account.
  • All the enhancements to control and freedom of Checkbook IRA notwithstanding, it is still an SDIRA – not a QRP.
  • A Checkbook IRA will be more straightforward to manage than a QRP, but does not have nearly the same tax flexibility as a QRP.
  • But, as mentioned multiple times in this post, not everyone can have a QRP.

QRP Takeaways: The QRP Bottom Line

  • A Qualified Retirement Plan, or QRP for short, is a great financial tool through which you can grow tax-free wealth with total control.
  • There is more than one type of QRP, and all of them can be self-directed.
  • Broadly speaking, tax-sheltered self-directed retirement accounts can be grouped into 2 categories: IRA & QRP
  • Each of the 2 categories, QRP & IRA, have many subcategories.
  • Every type of tax-sheltered account recognized by the IRS has its place.
  • Not everyone qualifies for a QRP.
  • A QRP that covers, or is required to cover, non-owner employees has incredible complexity to its operations and its filings – especially if it invests in real estate syndications, gold & silver, private stock, stat-ups or other self-directed assets.
  • Be extremely wary of anyone that oversimplifies any QRP. It’s not about the QRP plan document, it’s about QRP operation.
  • Be wary of any provider that is focused on promoting a single plan-type, whether that’s QRP or SDIRA. They’re unable to provide objective insight.
  • Look for a provider that’s unbiased, that can assist you with QRP, SDIRA, and all other tax-favored retirement accounts recognized by the IRS.

With the ongoing misconceptions on this topic, the following additional points should be helpful to self-directed investors:

  • All “Qualified Retirement Plans” (“QRPs”) are trusts set up for the benefit of “employees.”
  • A QRP can hold investments in its own name, much like any other trust.
  • A QRP can also hold assets indirectly through an LLC. This is analogous to a “Checkbook IRA” that uses an IRA-owned LLC to hold SDIRA assets.
  • Within an SDIRA, the only way to get “checkbook control” is through the use of an IRA-owned entity.
  • With QRPs, in contrast, “checkbook control” does not require the use of a QRP-owned entity to hold assets.
  • Notwithstanding, when correctly implemented, there are benefits to investing within a QRP-owned LLC.
  • TCF appears to take a “one-size fits all” approach by requiring that (a) every client establish a 401k, (b) every investors create a 401k-owned entity and (c) that entity be a Wyoming LLC or Colorado LLC.
  • A Wyoming LLC can, potentially, be a great thing – as part of comprehensive investment entity structuring. But without the proper structuring of your plan & particular investment, that Wyoming LLC can do more harm than good.
  • So, when you hear some talking about investing through a “QRP trust” or “retirement plan trust” – that’s for investing through a plan directly. Talk of investing through a Wyoming LLC refers to QRP/401k investments done through a QRP/401k-owned LLC.

Both Solo 401k and EQRP (a registered trademark of Total Control Financial LLC) are “marketing terms” – but only one of them was created to convey specific and targeted info. Neither EQRP, nor Solo 401k, are a type of plan. With a bit of generalizing, the following should be helpful:

  • The ultimate difference between a full ERISA plan and “non-ERISA plan” are the nature of eligible plan participants. Are they only business owners and spouses? Or, do they include non-owner employees?
  • A Solo 401k plan is a 401k plan, is a 401k plan, is a 401k plan; just that a 401k/QRP for an owner-only business is able to sidestep much of the complexity to which 401k plans are subject.
  • In other words “Solo 401k” does not describe the type of plan; it describes the type of business that adopts the 401k plan.
  • When you get a “Solo 401k,” you’re being given an honest description of the limits of the compliance support you’ll be getting – adequate for businesses that don’t have non-owner employees.
  • EQRP doesn’t describe anything. It’s just a trademark, not a type of plan described in the tax or labor code. You must ask the sellers of “EQRP” very targeted questions to determine what type of retirement plan you’re actually setting up and how it’s set up.
  • A 401k/QRP-plan is just a piece of paper. With the proper compliance awareness and support, it’s a very powerful financial tool. Without the proper compliance awareness and support, it’s a ticking bomb.
  • There’s a limit to what can be put in a blog post, but if you’ll be setting up a QRP/401k, with or without an LLC,  it is prudent to work with credentialed professionals that have a background in tax/401k compliance.

Through our extensive industry interactions, we continue to come across investors that are misinformed about QRP, EQRP, QRP-LLC, SDIRA and Solo 401k. The misinformation appears to be pervasive and this blog post is an attempt to correct misconceptions and protect well-meaning self-directed investors that perform due diligence.

When pursuing these accounts and accepting recommendations from people, it’s important to:

  • ensure there’s no conflict of interest (e.g., substantial affiliate kickbacks) and
  • perform at least a modicum of due diligence on the provider (check their background to see if it’s aligned with their claimed expertise, etc.)

At ReSure, we assist self-directed investors with every form of checkbook control self-directed retirement account structure – whether it be SDIRA or QRP with LLC & trust integration – and are committed to serving you with integrity.


*EQRP® & eQRP® are registered trademarks of Total Control Financial LLC; https://trademarks.justia.com/870/43/eqrp-87043744.html