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.
First the IRS started auditing § 419 plans in the 1990s, and then continued going after § 412(i) and other plans that they considered abusive, listed, or reportable transactions, or substantially similar to such transactions. If an IRS audit disallows the § 419 plan or the § 412(i) plan, not only does the taxpayer lose the deduction and pay interest and penalties, but then the IRS comes back under IRC 6707A and imposes large fines for not properly filing.
http://www.hg.org/article.asp?id=35505
ReplyDeleteIf The IRS Contacts You...
Lance Wallach
Keep your mouth shut-take this advice seriously.
If you give the agents any opening, you're dead.
They'll start with soft background questions, but before you know it, will have trapped you. And many
questions won't be genuine-that is, the agents already know the answers and are asking only to
see if you will lie or confess.
Questions typically asked by agents include:
Have you reported all of your income?
To Read More Click Link: If The IRS Contacts You...
“Benistar Plan is a thinly disguised vehicle for unlimited tax-deductible investments.”
In a recent U.S. Tax Court case, 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 preretirement life insurance to select employees of companies enrolled in
the plan. Small employers like the plans because they allow pretax contributions to be shielded
from taxation.
To Read More:
Benistar Problems
Abusive Insurance and Retirement Plans
Single–employer section 419 welfare benefit plans are
the latest incarnation in insurance deductions the IRS
deems abusive
BY LANCE WALLACH
SEPTEMBER
To read More Click Here Now
Are You A Material Advisor
Click link now
Captive insurance plans,
want to get audited?
Lance Wallach
When one scheme fails it isn’t long before a
resourceful promoter comes up with a
different product. Inevitably promoters find
some lawyer or accountant to draft a
favorable opinion letter and a new industry
is born. In a few years, however, the IRS
catches up and declares the arrangement
to be a listed transaction and abusive tax
shelter. As an expert witness I have never
lost a case in this field. It is easy to beat the
deep pockets of the insurance companies
who provide product to these plans. Even
though they have business owners sign
fraudulent disclaimers saying that the
owners will get their own tax advice. These
disclaimers are then used when the
inevitable happens, the IRS audits and the
business owner sues the insurance
company.
Click Here now to Read More
July
The Newspaper of the NYSSCPA
Vol. 10, No.13
IRS Clarifies Legality of 419(e) Plans
By Lance Wallach, CLU, ChFC, CIMC, and Ron Snyder, JD, EA
Following the U.S. Congress’ lead, on April 10 the IRS issued final regulations under Section
409A of the Internal Revenue Code. If the rules seemed unclear before, they are crystal clear
now: Most of the so-called “419(e)” plans as well as the remaining 419A(f)(6) plans are in
violation of the law and subject to hefty penalties.
A 419(e) plan is a benefit plan that generally seeks to make the purchase of life insurance tax-
deductible to employers. While the concept is appealing, most of the existing arrangements have
permitted the plans to transfer the insurance policies to the participants upon retirement.
To Read More Click Here