Generally, shares in a leveraged ESOP may be released from the suspense account and allocated to participants’ accounts using a principal-only method or a principal and interest method. The IRS recently stated that, if an ESOP allocates shares using the principal-only method but the loan documents require the principal and interest method to be used, there is an operational failure and a prohibited transaction has occurred.  IRS Technical Advice Memorandum 201425019 can be found here.