A lot of people are promoting the idea that you can use IRA or 401k money to start up a new business.
The IRS calls these particular strategies, ROBs “Rollover as Business Startups” and has issued a memo highlighting the various ways the IRS would like to attack these setups. Here is a link to the memo: http://iraideas.com/wp-content/uploads/2010/08/IRS-Robs-Memo.pdf
Also, the IRS is going to host a conference call where they discuss the topic this Friday. If you read this after Friday, you can go to this website http://www.irs.gov/retirement/article/0,,id=218995,00.html where they will probably post an audio recording of their view on using IRA money to fund or start a business. Its probably has the title, “Abusive Tax Avoidance Transactions”.
Look before you leap into this strategy.