Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
Lance Wallach, CLU, CHFC
Plainview, New York 11803
► Contact Expert Witnesses for These Areas of Expertise
Lance Wallach is the nation's leading expert on 419 and 412i plans, captive insurance, abusive insurance plans, listed transactions, reportable transactions, section 79 plans, IRC 6707A, 8886 form filing, abusive tax shelters, and more.
Areas of Expertise
- Pension Analysts
- Professional Responsibility
- Reportable Transaction
- Securities
- Tax Shelter
- Taxation
Articles Published by Lance Wallach, CLU, CHFC
The Trouble with Roth IRAs
Roth IRAs were established by the Taxpayer Relief Act of 1997 and named for its chief legislative sponsor, Sen. William Roth of Delaware. That law allows individuals to make contributions to a special “Roth” individual retirement account (“IRA”).
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Using Captive Insurance Companies for Savings
Small companies have been copying a method to control insurance costs and reduce taxes that used to be the domain of large businesses: setting up their own insurance companies to provide coverage when they think that outside insurers are charging too much.
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The IRS has Turned your Accountant into their Policeman
Every business owner thinks he pays too much in taxes, and in reality, most actually do. These days your accountant has to "play it safe". This is not reducing your tax bill.
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IRS Criminal Investigation Department Audits Section 79, Captive Insurance, 412i and 419 Scams
IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme, such as accountants or lawyers. Just as important is the investigation of investors who knowingly participate in abusive tax schemes.
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Abusive Tax Shelters again on the IRS “Dirty Dozen” List of Tax Scams for the 2015 Filing Season
"The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them," said IRS Commissioner John Koskinen. "The vast majority of taxpayers pay their fair share, and we are warning everyone to watch out for people peddling tax shelters that sound too good to be true.”
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Promoter Audits Allows the IRS to take down Hundreds of Captives at one Time
In 2013 the IRS finally launched its long-anticipated investigation of certain managers of insurance companies. This has finally culminated in the IRS issuing notices this year that it is conducting “promoter audits” of these manager, and serving subpoenas that request information regarding these captives.
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IRS Issues Final Regulations for Material Advisors, Accountants, Attorneys and Insurance Agents
If you sold, advised on or had anything to do with a listed transaction you will be fined by the IRS. For those that bought listed transactions like, 419 welfare benefit plans or 412i plans, you have been or will also be fined.
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Captive Insurance Plans, Want to Get Audited?
The insurance industry have been conjuring ways to make life insurance premiums tax deductible. Over the years we have seen many schemes that have failed IRS scrutiny. Welfare benefit plans set up under I.R.C. section 419, 412(e) plans and Producer Owned Reinsurance Companies (PORCs) are all common examples.
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"Group Captives" Insurance Scam
Just a few years ago, captive insurance companies were a hot news item in the arcane world of abusive tax shelters. Sleazy promoters were signing up small businesses in droves. If you created a cell captive as a property and casualty loss management tool, it’s probably legitimate. If you “bought” an off the shelf captive from a promoter who promised tax savings, there is a good chance you own an abusive tax shelter.
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Do You Have a Potential Abusive Tax Avoidance Transaction
People think that accountants and tax lawyers lead boring lives. Perhaps that may be true for some, but there is plenty of action these days with the IRS and their Employment Plans tax group. Recently, the IRS identified an “emerging issue” that it calls a potential Abusive Tax Avoidance Transaction. If you are a small business with an employment benefit plan, those words are never good to hear.
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FBAR OVDI Cause Americans Problems Over IRS Reporting Requirements
Aggressive enforcement of tax rules for American expatriates and their families has prompted some middle-income earners to renounce their U.S. citizenship rather than risk sizable taxes and penalties. WSJ's Liam Pleven reports on Lunch Break with Tanya Rivero.
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How Hartford Life and Other Insurance Companies Tricked their Agents and Got People in Trouble with the IRS
Agents from Hartford and other insurance companies were shown ways to sell large life insurance policies. This “Welfare Benefit Trust 419 plan or 412i plan should be shown to their profitable small business owners as a cure for paying too much taxes.
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Why You Should Stay Away from Section 79 Life Insurance Plans
I’ve had several calls lately from doctors who are being pitched Section 79 plans and are wondering if these plans are any good. The doctors are being told that Section 79 plans are the best wealth-building tool they can use to reduce their income taxes and create a tax-free retirement income.
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Captive Insurance Arrangements Are on the IRS Radar
Internal Revenue Service scrutiny of captive insurance arrangements is increasing, and much of it is aimed at small captives utilizing the 831(b) tax election, say many in the captive industry.
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Section 79 Scams and Captive Insurance History
When trying to understand how a product becomes a target of government scrutiny it helps to know its history. In the case of plans that fall under Internal Revenue Code Section 79, that history is complex.
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Captive Insurance, Buyer Beware
Closely-Held Insurance Company structures, known as "CHICs", are sometimes used to purchase life insurance outside the estate of the business owner with what amounts to pre-tax dollars. This should not be the primary focus of the captive, but is something that can be done with a portion of the captive's accumulated assets.
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Captive Insurance and Other Abusive Tax Shelters
Captive insurance arrangements that are funded with cash-value life insurance are the hot tax shelter for 2014. But serious questions exist whether they work as the promoter’s promise they will do.
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Large IRS Fines for Participants in 419, 412i, Captive Insurance, Section 79 Plans
In a recent U.S. Tax Court case, some taxpayers suffered a double loss. The taxpayers, consisting of four couples, had purchased welfare benefit plans marketed by Benistar 419 Plan Services. Under the plan, Benistar provided pre-retirement life insurance to select employees of companies enrolled in the plan.
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Life Insurance Industry Use of Captive Insurance/Reinsurance
In June 2013, the New York Department of Financial Services through its Superintendent, Benjamin M. Lawsky published the results of an examination they had conducted over the previous year, by the name “Shining a Light on Shadow Insurance: A Little-Known Loophole That Puts Insurance Policyholders and Taxpayers at Greater Risk”. The Lawsky Report does bring to light some potentially alarming results.
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This Can Happen to You
Several years ago at the advice of an accountant or investment advisor a client adopts a defined benefit plan for her business. She did so because she had been advised that under this type of plan she could contribute tax deductible contributions far greater than the limits permitted under a defined contribution plan. Each year she funds the maximum that the IRS permitted based on a report from her actuary. The plan investment returns have been very good.
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Fatca, Fbar, Offshore Amnesty Large Fines Coming
Overseas banks are warning current and former U.S. clients that their names and information soon will be disclosed and that such disclosure will disallow the taxpayer’s entry into the IRSs amnesty program for undeclared offshore accounts.
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IRS Code Section 79 Plans and Captive Insurance History
Insurance companies, agents, financial planners, and others have pushed abusive 419 and 412i plans for years. They claimed business owners could obtain large tax deductions. Insurance companies, agents and others earned very large life insurance commissions in the process.
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If You Are Thinking that Your Foreign Bank Is not Located in Switzerland...
and is a tiny hole in the wall in the middle of nowhere so I am safe, think again. Taxpayer Options: Taxpayers that have willfully chosen to pass on entering the 2009 or 2011 voluntary disclosure programs both have the following options.
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Have You Committed Income Tax Evasion Involving a Foreign Account
One of the most basic premises, but often the least understood by taxpayers, is that U.S. Citizens and Residents are taxed on their worldwide income.
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There Is No Place to Hide from IRS Scrutiny
Some people considering an IRS voluntary disclosure of their foreign income and assets don’t do so because they fear prosecution.
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Watch out because the IRS is watching 419 Plans
A business owner wants legitimate tax planning ideas. One solution sometimes offered today is a 419(e) plan (419 Welfare Benefit Plan). The local insurance agent or the company’s CPA who may have an insurance sales license, may suggest that the 419 Welfare Benefit Plan will provide shelter from taxes today, the costs of the plan are tax deductible and the plan will provide tax free benefits for the owner when he or she is ready to retire. The concept seems too good to be true.
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Can You Recover Money from 419 and 412i Plans?
Welfare Benefit Plan Fraud: What Remedies Are Available? If you’ve been the victim of a 419 Welfare Benefit Plan scheme and now find yourself owing the Internal Revenue Service (IRS) taxes on something you were told was going to be tax deductible, it’s important to know what remedies might be available to you.
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Should You Close Your Foreign Bank Account
Wouldn’t it be nice if we lived in a fair world? Wouldn’t it be nice if the IRS gave the little guy a break? Unfortunately, that’s just not the way it is. The news is littered with casualties of the IRS’ aggressive stance on taxpayers who don’t come clean.
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Could We Have This Debate Before It Is Too Late?
Is the use of fully insured group health insurance products as stop-loss coverage for group health plans going to remain a viable solution?
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Insurance Companies Are in Big Trouble and Most Do Not Know It
Many life insurance companies are using captive insurance to alter their books and look better. This could lead to another taxpayer bailout and insurance companies being taken over. This would put benefits in policies at risk for some policyholders.
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Corporate Owned (or Foundation/Trust) Accounts vs. Personal
If your primary reason for going offshore is for more secure, more private, safer and more varied banking and investment options then you may want to think again.
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If You Have or Had Money Overseas You Better File for Amnesty ASAP
According to various reports the IRS is investigating the Israeli banks Bank Leumi, Bank Hapoalim and Mizrahi Tefahot Bank for conspiring with individuals to enter into a loan scheme intended to evade taxes on funds brought to the U.S. from undisclosed foreign bank accounts.
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Welfare Benefit Plans Funded with Permanent Life Insurance Are Abusive Tax Scams
Similarly, the IRS position on single employer welfare benefit plans invested in permanent life insurance where the employer deducts more than the term cost of insurance is that those plans are also abusive tax scams.
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Section 79
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company).
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419, 412i, Captive Insurance and Section 79 Problems
Sometimes the IRS might disagree with planning you did with other advisors and you need to find help to ensure that your rights are protected, the facts are interpreted accurately and the law applied correctly.
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The Irrevocable Trust Cash Release Program
Through a special program, created by Money Watch Consultants Inc., called The Irrevocable Trust Cash Release Program, funds from the insured’s irrevocable trust can be released and made available to pay for long term care, in a facility or at home. And this care can even be provided by a family member.
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CPAs Dabbling is Russian Roulette with 5 Bullets - Part 4
In Part 3: we addressed that having an advanced accounting degree is not the same suite of skills as full time practice in a niche, such as business valuation.
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CPAs Dabbling is Russian Roulette with 5 Bullets - Part 3
In Part 2: we provided an illustration of what a prudent CPA firm did that outsourced work when it conflicted with their other practice services and the consequences of a CPA who had “followed the steps” in applying a discount, but was nevertheless penalized for dabbling because failed to support the proper level. We demonstrated what was not done and what should have occurred allowing the taxpayer to prevail.
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CPAs Dabbling is Russian Roulette with 5 Bullets - Part 2
In Part 1, we addressed the woeful inadequacy of education and experience of the accounting professional who chooses to dabble in a niche sector to make a few thousand dollars and why the AICPA, IRS and the Courts have brought the hammer down and the knowing or unwitting practitioner learns s/he is facing penalties, sanctions, fines, lawsuits and no E&O coverage. Game over.
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CPAs Dabbling Is Russian Roulette with 5 Bullets - Part 1
The AICPA has some straightforward opinions on CPAs who “dabble” in niche practice areas. In short, it brings ethical issues and subsequent penalties to bear. So, why do more than a few CPAs dabble in financial services, revenue sharing of insurance product, advise on equity transactions without FINRA/SEC approved licensing and, my favorite, business valuation? For the money. Why is it an ethical issue for the AICPA? Competency.
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Are You Really Prepared for the Valuation Litigation Meat Grinder?
Received your ABV certification. Check. Or your CVA certification. Check. Pulling down an extra $20,000 to $50,000 for the firm. Check. Performing 2 to 4 formal reports annually. Check. And you now have five years under your belt with 20 or so reports completed and while you haven’t memorized AICPA’s SSVS-1, you know it addresses valuation standards applicable to CPAs. Check. Check.
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IRS Attacks Business Owners, Accountants, Lawsuits over 412(i)/419 and Similar Insurance Based Plans
A 412(i) plan is a “defined benefit plan” – a retirement plan, a pension plan that claims to offer very large tax deductions. It is funded with annuity and life insurance products.
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What to do if you have a 419 Plan
The IRS to attacks the legitimacy of deductions taken for contributions to Section 419 plans in all circumstances. In addition, the IRS has classified most Section 419 arrangements as “listed transactions.” Any employer who currently sponsors a plan is well advised to take immediate action to terminate the plan and seek the assistance of an Expert Witness before the IRS contacts you.
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Are You Being Aggressive, Enough (Legally)?
The question in the 80′s used to be, “How far can I push it before I get audited?” However, with increased IRS enforcement, it’s now important to ask, “Will I pass an IRS audit?”
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IRS Announced the Reopening of its Offshore Voluntary Disclosure Program
On January 9, 2012, the IRS announced the reopening of its offshore voluntary disclosure program (now in its third iteration) to assist people who have been hiding offshore accounts in becoming compliant with their tax liabilities.
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IRS to Audit Sea Nine VEBA Participating Employers
The IRS may be auditing many more participating employers in the coming months.
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Protecting Clients from Fraud Incompetence and Scams
Over the past decade business owners have been overwhelmed by a plethora of choices designed to reduce the cost of providing employee benefits while increasing their own retirement savings. The solutions range from traditional pension and profit sharing plans to more advanced strategies.
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Taxpayers Must Report Certain Transactions to the IRS Under Section 6707A
Taxpayers must report certain transactions to the IRS under Section 6707A of the Tax Code, which was enacted in 2004 to help detect, deter, and shut down abusive tax shelter activities.
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Potential Abusive Tax Avoidance Transactions
412(i) plans and employers under audit for "potential abusive tax avoidance transactions" have asserted claims against insurance companies and their agents to recover money paid for insurance policies and for IRS assessed interest and penalties. Most are or will be audited by IRS for not properly filing under IRS code 6707a and will also lose the lawsuits for failing to mitigate the damages etc.
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Abusive Insurance and Retirement Plans
Single-employer section 419 welfare benefit plans are the latest incarnation in insurance deductions the IRS deems abusive.
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Abusive Tax Shelters
As an expert witness on 419 412i and abusive tax shelters my side has never lost a case. Many insurance agents that sold, and were sued, for selling those plans are now selling captive insurance and section 79 plans. The IRS is now looking at these plans. I have also received calls from people who are being audited by the IRS.
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Class Action Challenges Propriety of 412(e)(3) Annuities
On August 1, 2012, a putative class action lawsuit was filed in the District of Connecticut challenging the propriety of certain insurance contracts used to fund defined benefit plans described in section 412(e)(3) of the Internal Revenue Code. U.S. Telemanagement, Inc. v. Fidelity Security Life Insurance Co. et al., No. 3:12-cv-1110 JBA (D. Conn.).
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Issues With Potential Criminal Charges: Voluntary Disclosure - FBAR-OVDI
From the IRS website: New Filing Compliance Procedures for Non-Resident U.S. Taxpayers - The IRS is aware that some U.S. taxpayers living abroad have failed to timely file U.S. federal income tax returns or Reports of Foreign Bank and Financial Accounts (FBARs), Form TD F 90-22.1.
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FBAR OVDI Offshore Tax Issues
In 2012 the IRS announced another offshore voluntary disclosure program (the 2012 OVDI). These programs offer reduced penalties in exchange for taxpayers’ voluntarily coming into compliance before the IRS is aware of their prior tax indiscretions.
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OVDI FBAR Use It or Lose It
The IRS has announced a reopening of its 2011 offshore voluntary disclosure initiative (“OVDI”). This program will have essentially the same terms as the 2011 OVDI, but with a penalty rate of 27.5 percent (rather than 25 percent) of the highest account balance during the period covered by the initiative.
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The Bank Secrecy Act Requires a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR)
U.S. persons to avoid taxes by hiding money offshore. The FBAR covers a calendar year and must be filed no later than June 30th of the following year and includes any interest a U.S. person has. The Bank Secrecy Act requires that a Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts (FBAR), be filed if the aggregate balances of such foreign accounts exceed $10,000 at any time during the year.
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Fbar Ovdi Want to Go to Jail? Offshore Tax
The Federal government is aggressively pursuing taxpayers with undisclosed foreign accounts and unreported foreign income using information furnished by the foreign banks and other sources. If you have not yet applied for the Offshore Voluntary Disclosure Program, Recent convictions involving UBS Clients:
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Abusive 412(i) Tax Shelter Litigation
Parties: Typically, these transactions will include an Insurance company, accountant, tax attorney, and a promoter (someone with an insurance background, perhaps an actuary, who knows how to structure the policy itself). These groups will use insurance brokerages and sub-agents (licensed in the various states) to sell the policies themselves.
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Why Mutual Funds Are Not a Good Investment
Taxes take a large bite out of taxable mutual funds. Recent tax-break laws will end in 2010 and it would be smart for taxable mutual fund investors to keep an eye on one of the main drags on their performance: taxes. One key reason why mutual funds paid out such hefty taxable distributions in recent years is because they can no longer carry forward the steep losses incurred during the 2000-2002 bear market, which had been used to offset gains in recent years.
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Rethinking Investing in Mutual Funds
Taxes take a large bite out of taxable mutual funds. Recent tax-break laws will end in 2010 and it would be smart for taxable mutual fund investors to keep an eye on one of the main drags on their performance: taxes. One key reason why mutual funds paid out such hefty taxable distributions in recent years is because they can no longer carry forward the steep losses incurred during the 2000-2002 bear market, which had been used to offset gains in recent years.
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Abusive Insurance Plans Get Red Flag
Tax Briefs - The IRS in Notice 2007-83 identified as listed transactions certain trust arrangements involving cash value life insurance policies. Revenue Ruling 2007-65, issued simultaneously, addressed situations where the tax deduction has been disallowed, in part or in whole, for premiums paid on such cash-value life insurance policies.
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How to Get Fined $100,000 by the IRS and Lose Your License
Over the past decade, business owners have been overwhelmed by a plethora of arrangements designed to reduce the cost of providing employee benefits and taxes, while simultaneously increasing their own retirement savings. The solutions ranged from traditional pension and profit sharing plans to more advanced strategies.
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How to Get Audited
The government needs money. Hopefully, after you read this article, they will not get any more of yours. The IRS has learned that small businesses give them the best results on audits with the least effort on their part. The IRS has decided to go where they think the cheating is taking place. Unfortunately, they think that you and your small business are not paying your fair share.
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FBAR Information
The willful failure to file the FBAR report or retain records of your foreign accounts can potentially lead to a ten-year prison sentence and fines of up to $500,000. This criminal penalty applies to all US citizens pursuant to 31U.S.C Section S322B and 31 C.F.R. Section 103.S.9.C It may also apply to persons living in the United States who are not citizens.
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How to Avoid IRS Fines for You and Your Clients
Beware: The IRS is cracking down on small-business owners who participate in tax-reduction insurance plans sold by insurance agents, including defined benefit retirement plans, IRAs, and even 401(k) plans with life insurance. In these cases, the business owner is motivated by a large tax deduction; the insurance agent is motivated by a substantial commission.
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The Effectiveness of Your Expert Witness Could Win or Lose a Case for You
Benefits companies occasionally get sued and sue others. To defend the lawsuit, you need to hire an attorney. Normally the attorney needs an expert witness to bolster the case. In my experience, I have found that many attorneys are terrible at selecting expert witnesses. This is unfortunate because selecting the right expert witness can be critical to the outcome of the case.
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Bad Broker or Bad Luck?
You've lost money in the market – maybe a substantial amount. Money you thought was going to plan for your future, maybe put your kids through school is now gone. You're hurt and you're angry and we understand. Can you sue your broker, fund manager or financial adviser? It depends. The Big Question: Were You a Victim of Fraud or the Market? The big question is whether your broker did anything illegal.
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Business Owners and Accountants Face Huge IRS Fines
The IRS is attacking people in retirement plans and so-called 419 plans that contain life insurance, and the consequences are very bad. The IRS has collected millions by calling various types of retirement plans, more specifically 412(i), plans listed transactions or similar to. They have also attacked all types of 419 plans.
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IRS FBAR Voluntary Disclosure Program Updates
For years the IRS has been pursuing – the disclosure of information regarding undeclared interests of U.S. taxpayers (or those who ought to be U.S. taxpayers) in foreign financial accounts.
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Accountants Get Fined By IRS And Sued By Their Clients
Form 8886 is required to be filed by any taxpayer who is participating, or in some cases has participated, in a listed or reportable transaction.
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FBAR Amnesty Quiet Disclosures of Offshore Foreign Accounts
Taxpayers with foreign accounts can take advantage of the current voluntary disclosure program to minimize their tax exposure and to resolve these looming and unresolved problems. This disclosure program brings IRS scrutiny and potential civil penalties, and in some situations criminal penalties. Some taxpayers with interests in foreign assets have tried to sidestep these issues by employing a strategy called a “quiet disclosure.”
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Tax Crimes - Is the IRS Coming to Get You?
People who have money in other countries are a target of the IRS. I get a lot of phone calls with people who have these problems. 419, 412i, hiding money offshore etc. The IRS may be looking for you if you had anything to do with this. Tax crime attacks by the IRS are up almost 50% so you need to be careful. Last year IRS raided the offices of Benistar, Grist Mill Trust, Nova with about 50 agents and took all the files. If you did business with them the IRS will probably come to you.
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Section 79 and Other Abusive Plans Being Audited IRS
The IRS is on guard and starting to attack Section 79 plans. The decision to participate in such plan requires commitment to ensure the legality and proper guidelines are being followed in income inclusion, tax deductions and reporting. Based on the number of phone calls we are receiving from people being audited in abusive Section 79 plans the buyer must be very careful.
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Unsettled Times Call for a Little Magic
What does the future look like for those of us in the Employee Benefit industry? Some wonder if there will even be a group health insurance market in a few years. Until the US Supreme Court makes their decision(s) regarding Patient Protection and Affordable Care Act (PPACA) later this year, that is a question which seems to hold credence with many when it really shouldn’t.
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419 Welfare Benefit Plans
A view from a former IRS Agent, CPA, College Professor - Sam Susser - Welfare Benefit Plans (WBP), also known as Welfare Benefit Trusts and Welfare Benefit Funds are vehicles by which employers may offer their employees and retirees with certain types of insurance coverage (e.g., life insurance, health insurance, disability insurance, and long-term care), as well as other benefits such as severance payments and educational funding.
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401k Retirement Plan IRS Audits
401k IRS audits be careful - The Flooring Contractor Summer - Has Your 401k or Other Retirement Plan Been Reviewed? By Lance Wallach. Government officials now expect 401(k) plan sponsors to conduct periodic due diligence reviews. With respect to their 401k or other retirement plans, the problem is that most sponsors (owners) do not have the in house resources to do so.
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Section 79, Captive Insurance, IRS Audits and Lawsuits on 419 and 412i Plans
IRS Attacks Business Owners in 419, 412, Section 79 and Captive Insurance Plans Under Section 6707A - By Lance Wallach - Taxpayers who previously adopted 419, 412i, captive insurance or Section 79 plans are in big trouble. In recent years, the IRS has identified many of these arrangements as abusive devices to funnel tax deductible dollars to shareholders and classified these arrangements as listed transactions."
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Life Agents and Accountants Fined $100,000 for Selling 419 and Other Insurance Plans
Accountants and others fined $100,000 for signing tax returns and selling 419, 412i and other abusive life insurance plans. - Accounting Today - ‘Don’t Become A Material Advisor’ - Accountants, insurance professionals and others need to be careful that they don’t become what the IRS calls material advisers.
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419 Plans Attacked by IRS
Insurance agents and costs attacked. - Enrolled Agents Journal March*April - For years promoters of life insurance companies and agents have tried to find ways of claiming that the premiums paid by business owners were tax deductible. This allowed them to sell policies at a “discount”.
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FBAR International Tax Problems Transfer Pricing and the IRS
IRS is looking at transfer pricing, FBAR and international tax. FBAR International Tax Problems Transfer Pricing and the IRS - By Lance Wallach - The IRS dedicates enormous resources toward dealing with taxpayers who are involved with any form of transfer pricing.
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Older People Hurt by Insurance Salespeople
Insurance agents are taking advantage of older people. Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots, by Sid Kess; Author/Moderator: Lance Wallach, CLU, CHFC - Excerpts have been taken from this book about: Senior abuses.
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Offshore Money, FBAR International Tax and the IRS
FBAR, International Tax, IRS audits be careful. IRS Offshore Voluntary Disclosure Program Reopens Do YOU have money overseas? By Lance Wallach, CLU, CHFC - Recently the Internal Revenue Service reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes.
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Captive Insurance Buyer Beware
Is a captive insurance cell the way to go? - Accounting Today - Captive Insurance: Achieve large tax and cost reductions by renting a “CAPTIVE”. Most accountants and small business owners are unfamiliar with a great way to reduce taxes and expenses. By either creating or sharing “a captive insurance company”, substantial tax and cost savings will benefit the small business owner.
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Section 79, Captive Insurance, IRS Audits and Lawsuits
Section 79 and captive insurance plans with life insurance in them are being looked at by the IRS. We have received calls from people that are being audited. - The dangers of being "listed" - A warning for 419, 412i, Sec.79 and captive insurance. Accounting Today: October 25, 2010, By: Lance Wallach
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412i Plans Attacked by IRS, Lawsuits
IRS has been attacking abusive 412i plans for years. Business men have been suing the insurance agents who sold the plans. The IRS has attacked 412i, 419 plans for years. As a result promoters are now promoting section 79 and captive insurance plans. They are just starting to be attacked by the IRS.
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Captive Insurance but Be Careful
Most business owners want to: build wealth and maximize the value of what is left behind for heirs; protect their wealth to insure that what they have spent a lifetime building isn’t eaten away by taxes, inflation and/or the cost of medical care; distribute their wealth so that their loved ones may be taken care of, and see to it that their assets and possessions go where they want them to go in the time frame they want this to happen. This is the essence of estate planning.
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International Tax, Transfer Pricing, FBAR Problems
The IRS dedicates enormous resources toward dealing with taxpayers who are involved with any form of transfer pricing. The transfer pricing provisions of IRC 482 address four general types of transactions between commonly owned or controlled parties.
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412i, 419, Lawsuits, IRS Audits
419, 412i, plans are being audited by the IRS. Lawsuits are the result. Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans.
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You Can Beat the IRS
Beware of someone whose fee is based on a percentage of how much you save in taxes. Or who promises to get you a significantly higher refund than anyone else can. People like these are likely to prepare outrageous returns that will land you deep in trouble with the IRS.
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412i IRS Audits, Listed Transactions - IRS Auditing 412i Plans
Excerpts have been taken from this book about: Bruce Hink, who has given me permission to utilize his name and circumstances, is a perfect example of what the IRS is doing to unsuspecting business owners. What follows is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called a “listed transaction”.
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IRS Audits and Lawsuits
419 and 412i plans being audits, insurance agents sued. The IRS is cracking down on what it considers to be abusive tax shelters. Many of them are being marketed to small business owners by insurance professionals, financial planners and even accountants and attorneys. I speak at numerous conventions, for both business owners and accountants.
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419 Insurance Welfare Benefit Plans Continue to Get Accountants in Trouble
Popular so-called "419 Insurance Welfare Benefit Plans," sold by most insurance professionals, are getting accountants and their clients into more and more trouble. A CPA who is approached by a client about one of the abusive arrangements and/or situations to be described and discussed in this article must exercise the utmost degree of caution, not only on behalf of the client, but for his/her own good as well.
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Abusive Insurance, Welfare Benefit and Retirement Plans
The IRS has various task forces auditing all section 419, section 412(i), and other plans that tend to be abusive. These plans are sold by most insurance agents. The IRS is looking to raise money and is not looking to correct plans or help taxpayers.
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Tax Avoidance can Lurk in Employee Benefit Plans
As the Internal Revenue Service (IRS) continues to crack down on abusive retirement and employee benefit plans, many accountants will almost certainly, though inadvertently, land their clients and themselves in trouble. Two particular types of arrangements top the IRS list of abusive plans: the so-called 419 insurance welfare benefit plan and the 412(i) defined benefit retirement plan.
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Small Business Retirement Plans Fuel Litigation
Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans. The 412(i) and 419(e) plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefits plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.
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Don’t Give the IRS Every Last Drop
The chances of an individual being audited have approximately doubled since 2000. So you need to be careful with your tax return. Have you seen the commercials where certain companies advertise that they can settle an IRS debt for “pennies on the dollar?" Usually the offer is too good to be true. Besides, you never want to have the problem in the first place.
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Protecting Clients from Fraud, Incompetence, and Scams
This is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called a “listed transaction." Excerpts have been taken from this book about: Bruce Hink, who has given me permission to utilize his name and circumstances, is a perfect example of what the IRS is doing to unsuspecting business owners. What follows is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called a “listed transaction."
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Participate in a 419 or 412i Plan or Other Abusive Tax Shelter You Could Be Fined $200000 Per Year
Did you get a letter from the IRS threatening to impose this fine?
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Should You File, and Then Opt out?
Announced February 8, 2011, the IRS 2011 Offshore Voluntary Disclosure Initiative (OVDI) program is a welcome but conditional amnesty allowing taxpayers with foreign accounts to come clean and get into compliance with the IRS. The program runs through Sept. 9, 2011.
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IRS Audits 419, 412i, Captive Insurance Plans With Life Insurance, and Section 79 Scams
The IRS started auditing 419 plans in the ‘90s, and then continued going after 412i and other plans that they considered abusive, listed, or reportable transactions. Listed designated as listed in published IRS material available to the general public or transactions that are substantially similar to the specific listed transactions. A reportable transaction is defined simply as one that has the potential for tax avoidance or evasion.
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FBAR Offshore Bank Accounts and Foreign Income Attacked by IRS
You may want to think about participation in the IRS’ offshore tax amnesty program (called the Offshore Voluntary Disclosure Initiative). Do you want to play audit roulette with the IRS? Some clients think they are too small to be prosecuted. They are wrong.
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Don’t Get Stuck With a Foreign Bank Account
Have A Foreign Bank Account? FBAR Deadline is here. Filing deadline for the IRS’s offshore tax amnesty (called the Offshore Voluntary Disclosure Initiative).
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Don't Become a Material Adviser
Accountants, insurance professionals and others need to be careful that they don’t become what the IRS calls material advisors. If they sell or give advice, or sign tax returns for abusive, listed or similar plans; they risk a minimum $100,000 fine. Their client will then probably sue them after having dealt with the IRS.
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Accountants Business Owners and Others Face Large IRS Fines
Since the late nineties, unsuspecting business owners and professionals have purchased retirement plans and other plans from insurance professionals. The IRS has organized task forces to go after the abusive plans.
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Taxpayers Who Previously Adopted 419, 412i, Captive Insurance or Section 79 Plans are in Big Trouble
In recent years, the IRS has identified many of these arrangements as abusive devices to funnel tax deductible dollars to shareholders and classified these arrangements as listed transactions." Insurance agents, financial planners, accountants and attorneys seeking large life insurance commissions sold these plans.
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