412i and 419e plans litigation. IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.
Looking for the IRS Number? Call (800)829-1040.
Big Trouble Ahead For 412i and 419 Plan Participants - Lance Wallach
Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage" Names of People who SOLD: "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder Insurance Companies -- need to be 412 AND 419: Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
Thank you for your interest in learning more about the 419 plan promoter that was recently sued by the U.S. District Attorney in the Northern District of Illinois.
As I indicated in my newsletter, this is a good reminder for everyone that if it sounds too good to be true, that may really be the case.
And even if a tax structure is legitimate, if promoters over promote and flaunt it in the face of the IRS, typically the IRS issues negative press, or in this case negative Revenue Rulings, to throw cold water on it (and also in this case 419 plans funded with life insurance were added to the listed tax transaction list).
The IRS has again commenced assessing penalties under Code Section 6707A, the penalty provision applicable to failure to disclose Congress-enacted reportable transactions in 2004. Congress amended Section 6707A in 2010 to help alleviate its draconian consequences. Under newly amended Section 6707A, applicable to all penalties assessed after December 31, 2006, the penalty, subject to certain maximum and minimum amounts, is equal to 75% of the decrease in reported tax as a result of the reportable transaction. How the IRS is applying the Section 6707A penalty can be described as “troubling.” The following case shows how troubling the IRS position is.
In 2004 and 2005, a taxpayer took deductions for life insurance premiums paid to a Code Section 419(e) plan (419(e) plan). Transactions similar to the 419(e) plan were declared “listed transactions” in Notice 2007-83 on October 17, 2007. Under the applicable version of Treasury Regulation § 1.6011-4(e)(2)(i), the taxpayer was required to file Form 8886 with its “next filed tax return” after the transaction became a listed transaction. Accordingly, the taxpayer was required to file Form 8886 with its 2007 tax return, which it filed on October 14, 2008. The taxpayer did not file Form 8886 with its 2007 tax return. On October 14, 2008, the taxpayer was under audit for its participation in the 419(e) plan.
An IRS letter dated January 15, 2008 informed the taxpayer that it was under examination because of its participation in a widely marketed 419(e) plan. The taxpayer gave the IRS agent (the agent) all of the information requested by the agent. On September 8, 2008, the agent asked the taxpayer to extend until June 30, 2009 the statute of limitations regarding any deficiency related to the 419(e) plan for the 2004 taxable year. The taxpayer agreed to the extension. The agent issued Form 4549 showing the final deficiencies owed by the taxpayer relating to the 419(e) plan on November 7, 2008. The agent didn’t include any penalties on the Form 4549 issued — neither a Section 6662 penalty nor a Section 6707A penalty. The taxpayer paid the deficiencies shown on Form 4549 for its 2004 and 2005 tax years. On December 29, 2008, the group manager informed the taxpayer that the examination report was accepted for 2004 and 2005.
On February 22, 2012, the taxpayer received notification that the IRS was proposing to assess a Section 6707A penalty against the taxpayer for the year 2007 because of the taxpayer’s failure to include Form 8886 with its 2007 income tax return. The IRS had requested that the taxpayer extend the statute of limitations for the 2007 tax year until December 31, 2013, which the taxpayer did.
The first question is whether the IRS has asserted the Section 6707A penalty for the correct taxable year. If a taxpayer fails to include the information required under Section 6011 for a listed transaction, Section 6501(c)(10), enacted in 2004 at the same time as Code Section 6707A, operates to extend the statute of limitations by one year after the earlier of (A) the date the Secretary is furnished the information, or (B) the date a material advisor meets a Section 6112(b) request. However, Section 6501(c)(10) cannot extend the statute of limitations if the tax years of participation in the transaction are closed prior to the transaction becoming a listed transaction. Proposed treasury regulation section 301.6501(c)-1(g)(3)(iii) states that “if the taxable year in which the taxpayer participated in the listed transaction is different from the taxable y
When you have family members depending on your income, saving for the future of your loved ones is a good idea. Investing in life insurance will give you enough financial support to take care of the future of your loved ones when you are no longer around. A life insurance plan also makes provision for a cash value where a part of your premium is put into a savings account. Hence, while you invest for a secured future, you can make savings too.
Topics covered What is Life Insurance? What are the types of life insurance? How to save money on life insurance policy? How to decide on the type of life insurance to choose from? Can you pay your mortgage with life insurance? How should you choose a life insurance company? How does a life insurance company choose you? What is life insurance?
Life Insurance means insuring your life to save for the future of your famile processing department of the company.
Posts Tagged 419 plan Is the End at Hand for Tracy Sunderlage & Nikolai Battoo? Posted by Mahany & Ertl in Fraud Recovery on October 27, 2013
We have closely followed the many legal cases surrounding Nikolai Battoo and Tracy Sunderlage. Together they, and entities controlled or involved with them, have cost investors hundreds of millions of dollars. Our clients alone have lost many millions. A sampling of the entities connected with the two men or engaged in similar activities include PIWM, [...]
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NOVA BENEFIT PLANS: IRS CRACKING DOWN ON WELFARE BENEFIT PLANS Standard My original article on Nova Benefit Plans and the IRS’s actions relating to welfare benefit plans it believes are abusive was posted on March 14, 2011. On April 14, 2011, I was contacted by a lawyer representing Dan Carpenter in connection with NOVA Benefit Plans and Benistar. He asked for changes to the article to clarify that all allegations made by the IRS against Nova and others were only allegations, and criminal activity had not been proven in a court of law. Those changes were made immediately to avoid any confusion.
On June 1, 2011, I was again contacted by the attorney representing Daniel Carpenter, this time threatening to sue me if I did not remove the article from my site.
The article in question was not defamatory. It simply discussed the allegations made by the IRS and the potential problems NOVA was facing, and quoted and linked to other articles on Nova and Benestar.
If you wish to research NOVA Benefit Plans LLC of Simsbury, Connecticut, Section 419 of the Internal Revenue Service code, welfare benefit plans accused of being abusive tax shelters, and the criminal investigation of NOVA and the “armed assault” raid of Nova’s Grist Mill offices by the IRS, please visit the sites listed below.
Court Documents:
Find court documents on the PACER website for a nominal fee – Case No. 10MC00064, U. S. District Court, District of Connecticut http://docs.justia.com/cases/federal/district-courts/nebraska/nedce/8:2010cv00335/53415/26/0.pdf http://dockets.justia.com/docket/nebraska/nedce/8:2010cv00335/53415/ http://docs.justia.com/cases/federal/district-courts/nebraska/nedce/8:2010cv00335/53415/35/ Articles:
http://taxaudit419.com/article-32-Large419planMillenniumBankruptcy.html http://www.benistarabuses.com/ http://www.taxaudit419.com/article-31-BenistarCases.html http://www.submityourarticle.com/articles/Brian-Mahany-8446/IRS-lawyer-132568.php http://www.articleintelligence.com/Art/156078/6/More-Bad-News-for-Holders-of-Welfare-Benefit-Plans-Nova-Faces-Another-Legal-Setback.html http://www.investingclub.org/2011/02/what-to-do-when-your-welfare-benefit-plan-is-in-danger/ http://www.bizclaims.com/2011/01/niche-nova-millennium-benestar-grist-mill-trust-scams-audited-by-irs-419-welfare-benefit-plans-audited DATE14 MARCH 2011 TAGSAVUSIVE TAX SHELTER, BENISTAR, BRIAN MAHANY, LANCE WALLACH, NOVA BENEFIT PLANS COMMENTS1 COMMENT POST NAVIGATION MORE EVIDENCE OF FRAUD AT CHINA MEDIAEXPRESS HOLDINGSPLANNING AND CONDUCTING CORPORATE FRAUD INVESTIGATIONS ONE THOUGHT ON “NOVA BENEFIT PLANS: IRS CRACKING DOWN ON WELFARE BENEFIT PLANS”
MIKE you probably have not been hearing much from Carpenter now that he is in jail and facing an additional indictment.
IRS raids benistar, grist mill and nova trust, founder in jail Edit article Published on December 12, 2016 LikedUnlikeIRS raids benistar, grist mill and nova trust, founder in jail1Comment0ShareShare IRS raids benistar, grist mill and nova trust, founder in jail0 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach
IRS raided Nova, Benistar, Grist Mill Trust taking records etc. IRS is now auditing this 419 plan. As a result lawsuits against insurance agents, insurance cos. etc are resulting. – 419 Life Insurance Plans and Other Scams ” Large IRS Fines” The IRS Raids Plan Promoter Benistar, and What Does All This Mean To You? October 13
Recently IRS raided Benistar, which is also known as the Grist Mill Trust, the promoter and operator of one of the better known and more heavily scrutinized of the Section 419 life insurance plans. IRS attacked the Benistar 419 plan, and one of its tactics was to demand the names of all the clients Benistar worked with âEUR” so they could be audited by the IRS, Benistar refused to give the names and actually appealed the decision to turn over the names. The appeal was unsuccessful, but Benistar officials still refused to give up the names. Recently, the IRS raided the Benistar office and took hundreds of boxes of information, which included information on clients who were in their 419 plan. In documents filed by Benistar itself, they stated that 35 to 50 armed IRS agents descended upon their office to seize documents.
LikedUnlikeIRS raids benistar, grist mill and nova trust, founder in jailCommentShareShare IRS raids benistar, grist mill and nova trust, founder in jail Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 446 articles
You Don't Have To Just Take OUR Word For It. Read What Our Clients Have To Say! The IRS says:tes “reflecting the tax consequences of the strategy,” it could be argued that continued benefit from a tax deferral for a previous tax deduction is within the contemplation of a “tax consequence” of the plan strategy. Also, many taxpayers who no longer make contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is taken from the plan to pay premiums to keep life insurance policies in force. In these ways, it could be argued that these taxpayers are still “contributing,” and thus still must file Form 8886.
It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20, which classifies 419(e) transactions, appears to be concerned with the employer’s contribution/deduction amount rather than the continued deferral of the income in previous years. Another important issue is that the IRS has called CPAs material advisors if they signed tax returns containing the plan, and got paid a certain amount of money for tax advice on the plan. The fine is $100,000 for the CPA, or $200,000 if the CPA is incorporated. To avoid the fine, the CPA has to properly file Form 8918.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He is also a featured writer and has been interviewed on television and financial talk shows including NBC, National Pubic Radio’s All Things Considered and others. Lance authored Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.
Contact him at: 516.938.5007, Wallachinc@gmail.com, or Www.taxadvisorexperts.org, or Www.taxlibrary.us.
Expert Witness in 419 Plan and other Civil Litigation Frankly, not everybody does it right. Whether through ignorance or ill-intent, some folks sell insurance based programs with tax benefits, such as 419 Plans and 412(i) Plans, or promote premium financing or STOLI programs to unsuspecting consumers leaving the consumer to be eaten alive, either by the IRS or by a turn in the economy, when all goes wrong. But the opposite is also true. Some 419 Plans and 412(i) Plan are very well designed and flawlessly implemented but the IRS just shoots first and aims second. Some legitimate premium financing might miscue.
Now, for the restrictive property trust, is this a plan under 419?-dead, section 83? or 409A? Have you read the 300 pages of regulations on 409A? The commentators are unclear. One claims to have a private letter ruling but does not publish it.
Before you engage in the financial fantasy think hard, do you want to buy a lawsuit? The plaintiff attorney is waiting for you!
I went to Google, which, of course, knows all. There in all its splendor were comments on the trust citing 419, section 83, 409 A. One website was bold enough to say they have a patent (even though this type of patent has been illegal for years). But, this type of plan has been dead since 2000 when the Third Circuit upheld Neonatology Associates v. Commissioner.
What confuses me is why anyone would persist to create a plan that, at best, will not work as well as a traditional pension, but more likely the deduction will be disallowed along with every penalty known to the IRS?
I prefer to follow the law as opposed to engage in "financial fantasies" (this was the wording the court used in Neonatology)
I went to Google, which, of course, knows all. There in all its splendor were comments on the trust citing 419, section 83, 409 A. One website was bold enough to say they have a patent (even though this type of patent has been illegal for years). But, this type of plan has been dead since 2000 when the Third Circuit upheld Neonatology Associates v. Commissioner.
What confuses me is why anyone would persist to create a plan that, at best, will not work as well as a traditional pension, but more likely the deduction will be disallowed along with every penalty known to the IRS?
I prefer to follow the law as opposed to engage in "financial fantasies" (this was the wording the court used in Neonatology)
Restricted Property Trusts Protect Yourself From IRS Audits HOME FILE FORM 8886 TODAY CONTACT US Welcome To Our Website for professionals and business entities who must comply with new IRS Notice requirements.
Failing to File Form 8886 for Vebas like Sea Nine Veba, or any 419, section 79, small Captives, or Restricted Property Trusts, creates multiple penalties!
The Form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit program or 419 Plan.
If you are considering any of theses plans you need to take a few steps to protect yourself from potential audits from the IRS.
If you do not believe this Google Lance Wallach and whoever is advising you: YOU decide whom YOU Trust! Lance Wallach, National Society of Accountants, Speaker of the Year Member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i),419, Section 79, RPT, FBAR and Captive insurance plans.
Get Help Filing Form 8886 _ We make Filing This Form Painless!!! Get all Your Money Back From the IRS_ Protect Yourself from IRS Audits_ Call Today! Need Help? Contact Us Today!
Type any word(s) SEARCH 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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return. Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality. With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
Type any word(s) SEARCH 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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return. Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality. With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
Type any word(s) SEARCH 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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return. Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality. With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
Type any word(s) SEARCH 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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return. Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality. With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
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EMAIL EXCHANGE WITH IRS AGENT FROM VIDEO The IRS agent pointed to in the video followed up with Lance after the AACPA convention LANCE WALLACH SPEAKING AT ATTORNEY CPA CONVENTION ABOUT SECTION 79 PLANS LANCE WALLACH AND THE IRS SENT: THURSDAY, June 04, 2009 11:43 AM To: Itzkowitz Ronald R Subject: Lance Wallach AAACPA meeting When I met you at the meeting, I was the first speaker, I gave you some articles. I also then emailed them to you. I am following up to see if you can use any of them, or if you have suggestions for me. Look forward to teasing you the next time that I speak, and you are there. You are a good sport.
Lance Wallach
From: Ronald Itzkowitz To:Lance Wallach Sent: 6/4/2009 2:03 P.M. Subj: RE: Lance Wallach AAACPA meeting Hi Lance, I did use the copies you gave me at the meeting, however, never received any emails. Would you be kind enough to re-send them to me.
Thank you, Ronald R. Itzkowitz National EP Customer Partnership Analyst Internal Revenue Service - Employee Plans
Tax Expert Lance Wallach Speaking at Attorney... by lancewallachextra
Section 79 Help From: Lance Wallach Sent: Friday, December 23, 2011 8:46 AM To: Jon Havicon Subject: Re: IRC 79 Dear Jon:
Many of the promoters of sect.79 plans are the same people that promoted 419 and abusive 412i plans. Most of the abuses, as of the prior plans, are in the face to face selling. Saying that the IRS approves the plans, putting large amounts of permanent life insurance in the plans and saying that it is deductible, etc. It is the same with the sales of captive insurance. They are telling the owners of the business that they can deduct large amounts of life insurance and in later years get the money out tax free. These promoters are a lot smarter about what they put in print, than in prior years. You may want to go on Google and type in Section 79 plans and see all the promoters and others.
In the 90s I warned about abusive 419 and 412i plans but the IRS did not do much to catch the abusers for years. In 2002 I spoke at ASPA in Washington, and then had a private meeting with senior IRS and Treasury officials which was arranged by the then acting IRS Comm. and arranged by MS. Gold, giving more details. Then the IRS really started going after all of the abusive 419 and 412i plans.This is the same pattern today.
Lance Wallach
From: Jon Havicon Sent: Friday, December 23, 2011 9:46 AM To: Lance Wallach Subject: Re: IRC 79
Thanks for the update. I'll forward to our Lead Development Center for further review.
Skip to main content LinkedIn Account Navigation restrictive property trust get audited without 8886 IRS form Edit article Published on January 27, 2017 LikedUnlikerestrictive property trust get audited without 8886 IRS form3Comment7ShareShare restrictive property trust get audited without 8886 IRS form8 Stacey Arenas Stacey Arenas Assistant Managing Director, Marketing Manager at Vebaplan LLC
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You would think after Neonatology v. Commissioner and the listed transaction rules under 6707A and IRC section 264 that people would stay away from 419 plans as an area where life insurance is tax deductible. But they do not.
Now comes the latest SCAM called "The Restrictive Property Trust"-a new model 419 SCAM which in conjunction with section 83 makes the insurance tax deductible going in and tax free coming out...with some modifications. The problem...it is a SCAM.
The Restrictive Property Trust
There is of course no such creature in the Internal Revenue Code. The promoter claims a patent-but tax strategy patents were outlawed in 2011 (maybe the promoter received a patent in 2010).
In any event the patent is worthless since the abundance of case law and dicta which struck down each and every 419 plan funded with life insurance (cannot get over 264). This was the "Grist Mill Trust"/SCAM which even had a favorable tax opinion from the largest law firm in New Jersey to the STEP plan/SCAM and countless others.
Non Legal opinion=WORTHLESS
All you have to do is read Barry v. Indianapolis Life. Non-Tax expert opinions are worthless. Next, I reviewed who is promoting this plan. A person who has a securities license. In court every thing he says is….worthless.
Final thoughts.
If you are thinking about selling the restrictive property trust-DO NOT. These plans make a BAD NAME for the insurance industry.
LikedUnlikerestrictive property trust get audited without 8886 IRS formCommentShareShare restrictive property trust get audited without 8886 IRS form Stacey Arenas Stacey Arenas Assistant Managing Director, Marketing Manager at Vebaplan LLC 550 articles 7 commentsNewest
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2w Lance Wallach Business Owner at National Offices of Lance Wallach +1 516.938.5007lance@expertwitness.taxNationwide - U.S.A Restricted Property Trusts Protect Yourself From IRS Audits HOME FILE FORM 8886 TODAY CONTACT US Welcome To Our Website for professionals and business entities who must comply with new IRS Notice requirements… See more LikeReply 2w Lance Wallach Business Owner at National Offices of Lance Wallach CJA and associates 419 plan lawsuits IRS audits CJA and associates 419 plan lawsuits IRS audits logo CJA and associates 419 plan lawsuits IRS audits Summary Information about CJA and associates 419 plan lawsuits IRS audits was first submitted to Scambook on Dec 06, 2014.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually. Mr. Wallach writes for over fifty publications including AICPA Planner, Accounting Today, CPA Journal, National Public Accountant, Enrolled Agents Journal, Financial Planning, Registered Representative, Tax Practitioners Journal, Connecticut Law Tribune, Barrister, CPA/Law Forum, Employee Benefit News, Health Underwriter, Advisor and the American Medical Association News. Mr. Wallach teaches accountants how to increase their clientele. Wallach has been featured on television and radio financial talk shows including NBC, National Pubic Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and his side has never lost a case. Visit Taxaudit419.com, Vebaplan.org and Taxadvisorexpert.com.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually. Mr. Wallach writes for over fifty publications including AICPA Planner, Accounting Today, CPA Journal, National Public Accountant, Enrolled Agents Journal, Financial Planning, Registered Representative, Tax Practitioners Journal, Connecticut Law Tribune, Barrister, CPA/Law Forum, Employee Benefit News, Health Underwriter, Advisor and the American Medical Association News. Mr. Wallach teaches accountants how to increase their clientele. Wallach has been featured on television and radio financial talk shows including NBC, National Pubic Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and his side has never lost a case. Visit Taxaudit419.com, Vebaplan.org and Taxadvisorexpert.com.
Notice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
When a Tax Court judge writes "purported" it generally means something like "Liar, liar pants on fire" or bovine excrement. Northwestern's conservatism in not getting caught up in the 419 mania is another mark in its favor.ther guises.
Companies who set up IRS Code Section 419 Welfare Benefit Plans that were funded by life insurance are finding they've got big problems. Although insurance agents told business owners that their contributions would be tax deductible, they're actually reportable transactions – which has left many companies owing taxes they simply can't pay. What is a 419 welfare benefit plan?
A welfare benefit plan is effectively a corporate-sponsored insurance plan, according to Steve Burgess, an insurance expert on 412(i) pension and 419 welfare benefit plans. He explained, “A corporation sets up a trust to provide insurance benefits for its employees. That’s the basic concept behind it. The corporation's contributions into the trust are tax-deductible and many of these plans allow you to pick and choose which employees you want involved in the plan.”
Abuses with plans funded with life insurance
Burgess says that while not all of these plans bad, the ones that are bad are very abusive – and those generally happen with plans that are funded with life insurance and that are commission-driven. He told us:
Basically what happens is that an insurance agent comes to a business owner and says, 'Hey, I can put this plan in place for you. You can make contributions to it. I’ll set it up so that your money goes into this nice life insurance policy and it will all be tax-deductible to you. Then at some point in the future, you can borrow the money back and not pay any taxes on it.' What people don't realize is that, again, like 412(i) plans (link to article entitled 412(i) Pension Plan Fraud: Schemes Motivated By Big Insurance Commissions), many of these plans are reportable transactions to the IRS and that they’re not always compliant with how a welfare benefit plan is supposed to be set up. They get audited by the IRS who tells them they're not going to allow it and that they're going to have to restate the income and pay taxes on it.
Two big issues surrounding 419 schemes
There are two big issues surrounding 419 schemes, according to Burgess – paying taxes on the plan and finding out that individuals and companies no longer have any rights in the policy. He explained each issue:
Paying taxes. Although somebody has spent a great deal of money to set this thing up, the IRS tells them, 'No, this doesn’t work.' They now have to report the money they put into the policy as income and they owe the taxes on it. However, the policy’s got a big surrender charge on it and you can’t just take the money out of the policy to pay the taxes because there’s not enough available to you. That's a very big issue. No rights. The other issue is that once people get into these plans, they find out that the trust that was set up actually owns the policy, not the individual and not the corporation, and they no longer have any rights in that policy. So, they have to wait years and years and years to get anything back out.
Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage" Names of People who SOLD: "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder Insurance Companies -- need to be 412 AND 419: Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
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ReplyDeleteWelfare Benefit Plan
Abusive Tax Shelters
Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
Lance Wallach, CLU, CHFC
68 Keswick Lane
Plainview, New York 11803
Contact Information
Email :
Lanwalla@aol.com
Phone :
516-938-5007
Address :
Lance Wallach and Ira Kaplan, ESQ
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Delete419 Plan Promoter Sued
ReplyDeleteThank you for your interest in learning more about the 419 plan promoter that was recently sued by the U.S. District Attorney in the Northern District of Illinois.
As I indicated in my newsletter, this is a good reminder for everyone that if it sounds too good to be true, that may really be the case.
And even if a tax structure is legitimate, if promoters over promote and flaunt it in the face of the IRS, typically the IRS issues negative press, or in this case negative Revenue Rulings, to throw cold water on it (and also in this case 419 plans funded with life insurance were added to the listed tax transaction list).
The IRS has again commenced assessing penalties under Code Section 6707A, the penalty provisio
ReplyDeleteThe IRS has again commenced assessing penalties under Code Section 6707A, the penalty provision applicable to failure to disclose Congress-enacted reportable transactions in 2004. Congress amended Section 6707A in 2010 to help alleviate its draconian consequences. Under newly amended Section 6707A, applicable to all penalties assessed after December 31, 2006, the penalty, subject to certain maximum and minimum amounts, is equal to 75% of the decrease in reported tax as a result of the reportable transaction. How the IRS is applying the Section 6707A penalty can be described as “troubling.” The following case shows how troubling the IRS position is.
ReplyDeleteIn 2004 and 2005, a taxpayer took deductions for life insurance premiums paid to a Code Section 419(e) plan (419(e) plan). Transactions similar to the 419(e) plan were declared “listed transactions” in Notice 2007-83 on October 17, 2007. Under the applicable version of Treasury Regulation § 1.6011-4(e)(2)(i), the taxpayer was required to file Form 8886 with its “next filed tax return” after the transaction became a listed transaction. Accordingly, the taxpayer was required to file Form 8886 with its 2007 tax return, which it filed on October 14, 2008. The taxpayer did not file Form 8886 with its 2007 tax return. On October 14, 2008, the taxpayer was under audit for its participation in the 419(e) plan.
An IRS letter dated January 15, 2008 informed the taxpayer that it was under examination because of its participation in a widely marketed 419(e) plan. The taxpayer gave the IRS agent (the agent) all of the information requested by the agent. On September 8, 2008, the agent asked the taxpayer to extend until June 30, 2009 the statute of limitations regarding any deficiency related to the 419(e) plan for the 2004 taxable year. The taxpayer agreed to the extension. The agent issued Form 4549 showing the final deficiencies owed by the taxpayer relating to the 419(e) plan on November 7, 2008. The agent didn’t include any penalties on the Form 4549 issued — neither a Section 6662 penalty nor a Section 6707A penalty. The taxpayer paid the deficiencies shown on Form 4549 for its 2004 and 2005 tax years. On December 29, 2008, the group manager informed the taxpayer that the examination report was accepted for 2004 and 2005.
On February 22, 2012, the taxpayer received notification that the IRS was proposing to assess a Section 6707A penalty against the taxpayer for the year 2007 because of the taxpayer’s failure to include Form 8886 with its 2007 income tax return. The IRS had requested that the taxpayer extend the statute of limitations for the 2007 tax year until December 31, 2013, which the taxpayer did.
The first question is whether the IRS has asserted the Section 6707A penalty for the correct taxable year. If a taxpayer fails to include the information required under Section 6011 for a listed transaction, Section 6501(c)(10), enacted in 2004 at the same time as Code Section 6707A, operates to extend the statute of limitations by one year after the earlier of (A) the date the Secretary is furnished the information, or (B) the date a material advisor meets a Section 6112(b) request. However, Section 6501(c)(10) cannot extend the statute of limitations if the tax years of participation in the transaction are closed prior to the transaction becoming a listed transaction. Proposed treasury regulation section 301.6501(c)-1(g)(3)(iii) states that “if the taxable year in which the taxpayer participated in the listed transaction is different from the taxable y
When you have family members depending on your income, saving for the future of your loved ones is a good idea. Investing in life insurance will give you enough financial support to take care of the future of your loved ones when you are no longer around. A life insurance plan also makes provision for a cash value where a part of your premium is put into a savings account. Hence, while you invest for a secured future, you can make savings too.
ReplyDeleteTopics covered
What is Life Insurance?
What are the types of life insurance?
How to save money on life insurance policy?
How to decide on the type of life insurance to choose from?
Can you pay your mortgage with life insurance?
How should you choose a life insurance company?
How does a life insurance company choose you?
What is life insurance?
Life Insurance means insuring your life to save for the future of your famile processing department of the company.
Posts Tagged 419 plan
ReplyDeleteIs the End at Hand for Tracy Sunderlage & Nikolai Battoo?
Posted by Mahany & Ertl in Fraud Recovery on October 27, 2013
We have closely followed the many legal cases surrounding Nikolai Battoo and Tracy Sunderlage. Together they, and entities controlled or involved with them, have cost investors hundreds of millions of dollars. Our clients alone have lost many millions. A sampling of the entities connected with the two men or engaged in similar activities include PIWM, [...]
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ReplyDeleteNOVA BENEFIT PLANS: IRS CRACKING DOWN ON WELFARE BENEFIT PLANS
ReplyDeleteStandard
My original article on Nova Benefit Plans and the IRS’s actions relating to welfare benefit plans it believes are abusive was posted on March 14, 2011. On April 14, 2011, I was contacted by a lawyer representing Dan Carpenter in connection with NOVA Benefit Plans and Benistar. He asked for changes to the article to clarify that all allegations made by the IRS against Nova and others were only allegations, and criminal activity had not been proven in a court of law. Those changes were made immediately to avoid any confusion.
On June 1, 2011, I was again contacted by the attorney representing Daniel Carpenter, this time threatening to sue me if I did not remove the article from my site.
The article in question was not defamatory. It simply discussed the allegations made by the IRS and the potential problems NOVA was facing, and quoted and linked to other articles on Nova and Benestar.
If you wish to research NOVA Benefit Plans LLC of Simsbury, Connecticut, Section 419 of the Internal Revenue Service code, welfare benefit plans accused of being abusive tax shelters, and the criminal investigation of NOVA and the “armed assault” raid of Nova’s Grist Mill offices by the IRS, please visit the sites listed below.
Court Documents:
Find court documents on the PACER website for a nominal fee – Case No. 10MC00064, U. S. District Court, District of Connecticut
http://docs.justia.com/cases/federal/district-courts/nebraska/nedce/8:2010cv00335/53415/26/0.pdf
http://dockets.justia.com/docket/nebraska/nedce/8:2010cv00335/53415/
http://docs.justia.com/cases/federal/district-courts/nebraska/nedce/8:2010cv00335/53415/35/
Articles:
http://taxaudit419.com/article-32-Large419planMillenniumBankruptcy.html
http://www.benistarabuses.com/
http://www.taxaudit419.com/article-31-BenistarCases.html
http://www.submityourarticle.com/articles/Brian-Mahany-8446/IRS-lawyer-132568.php
http://www.articleintelligence.com/Art/156078/6/More-Bad-News-for-Holders-of-Welfare-Benefit-Plans-Nova-Faces-Another-Legal-Setback.html
http://www.investingclub.org/2011/02/what-to-do-when-your-welfare-benefit-plan-is-in-danger/
http://www.bizclaims.com/2011/01/niche-nova-millennium-benestar-grist-mill-trust-scams-audited-by-irs-419-welfare-benefit-plans-audited
DATE14 MARCH 2011
TAGSAVUSIVE TAX SHELTER, BENISTAR, BRIAN MAHANY, LANCE WALLACH, NOVA BENEFIT PLANS
COMMENTS1 COMMENT
POST NAVIGATION MORE EVIDENCE OF FRAUD AT CHINA MEDIAEXPRESS HOLDINGSPLANNING AND CONDUCTING CORPORATE FRAUD INVESTIGATIONS
ONE THOUGHT ON “NOVA BENEFIT PLANS: IRS CRACKING DOWN ON WELFARE BENEFIT PLANS”
MIKE
you probably have not been hearing much from Carpenter now that he is in jail and facing an additional indictment.
IRS raids benistar, grist mill and nova trust, founder in jail
ReplyDeleteEdit article
Published on December 12, 2016
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Lance Wallach
Lance Wallach
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ABOUT LANCE WALLACH OUR SERVICES UNDERSTANDING 419 LITIGATION
419, 419E, BENISTAR, IRS AUDITS
IRS AUDITS 419 PLANS, IRS RAIDS BENISTAR, NOVA, GRIST MILL TRUST
JUNE 1, 2015 ADMIN LEAVE A COMMENT
IRS raided Nova, Benistar, Grist Mill Trust taking records etc. IRS is now auditing this 419 plan. As a result lawsuits against insurance agents, insurance cos. etc are resulting. – 419 Life Insurance Plans and Other Scams ” Large IRS Fines” The IRS Raids Plan Promoter Benistar, and What Does All This Mean To You? October 13
Recently IRS raided Benistar, which is also known as the Grist Mill Trust, the promoter and operator of one of the better known and more heavily scrutinized of the Section 419 life insurance plans. IRS attacked the Benistar 419 plan, and one of its tactics was to demand the names of all the clients Benistar worked with âEUR” so they could be audited by the IRS, Benistar refused to give the names and actually appealed the decision to turn over the names. The appeal was unsuccessful, but Benistar officials still refused to give up the names. Recently, the IRS raided the Benistar office and took hundreds of boxes of information, which included information on clients who were in their 419 plan. In documents filed by Benistar itself, they stated that 35 to 50 armed IRS agents descended upon their office to seize documents.
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Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
446 articles
You Don't Have To Just Take OUR Word For It.
ReplyDeleteRead What Our Clients Have To Say!
The IRS says:tes “reflecting the tax consequences of the strategy,” it could be argued that continued benefit from a
tax deferral for a previous tax deduction is within the contemplation of a “tax consequence” of the plan strategy. Also, many
taxpayers who no longer make contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is
taken from the plan to pay premiums to keep life insurance policies in force. In these ways, it could be argued that these
taxpayers are still “contributing,” and thus still must file Form 8886.
It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as
described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20, which
classifies 419(e) transactions, appears to be concerned with the employer’s contribution/deduction amount rather than the
continued deferral of the income in previous years. Another important issue is that the IRS has called CPAs material advisors if
they signed tax returns containing the plan, and got paid a certain amount of money for tax advice on the plan. The fine is
$100,000 for the CPA, or $200,000 if the CPA is incorporated. To avoid the fine, the CPA has to properly file Form 8918.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals,
Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He is also a featured
writer and has been interviewed on television and financial talk shows including NBC, National Pubic Radio’s All Things
Considered and others. Lance authored Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and
Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books
including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.
Contact him at:
516.938.5007,
Wallachinc@gmail.com, or
Www.taxadvisorexperts.org, or
Www.taxlibrary.us.
Expert Witness in 419 Plan and other Civil Litigation
ReplyDeleteFrankly, not everybody does it right. Whether through ignorance or ill-intent, some folks sell insurance based programs with tax benefits, such as 419 Plans and 412(i) Plans, or promote premium financing or STOLI programs to unsuspecting consumers leaving the consumer to be eaten alive, either by the IRS or by a turn in the economy, when all goes wrong. But the opposite is also true. Some 419 Plans and 412(i) Plan are very well designed and flawlessly implemented but the IRS just shoots first and aims second. Some legitimate premium financing might miscue.
MuniBond Life Insurance
ReplyDelete412i, ve pose of assessing tax.
Now, for the restrictive property trust, is this a plan under 419?-dead, section 83? or 409A? Have you read the 300 pages of regulations on 409A? The commentators are unclear. One claims to have a private letter ruling but does not publish it.
ReplyDeleteBefore you engage in the financial fantasy think hard, do you want to buy a lawsuit? The plaintiff attorney is waiting for you!
I went to Google, which, of course, knows all. There in all its splendor were comments on the trust citing 419, section 83, 409 A. One website was bold enough to say they have a patent (even though this type of patent has been illegal for years). But, this type of plan has been dead since 2000 when the Third Circuit upheld Neonatology Associates v. Commissioner.
ReplyDeleteWhat confuses me is why anyone would persist to create a plan that, at best, will not work as well as a traditional pension, but more likely the deduction will be disallowed along with every penalty known to the IRS?
I prefer to follow the law as opposed to engage in "financial fantasies" (this was the wording the court used in Neonatology)
I went to Google, which, of course, knows all. There in all its splendor were comments on the trust citing 419, section 83, 409 A. One website was bold enough to say they have a patent (even though this type of patent has been illegal for years). But, this type of plan has been dead since 2000 when the Third Circuit upheld Neonatology Associates v. Commissioner.
ReplyDeleteWhat confuses me is why anyone would persist to create a plan that, at best, will not work as well as a traditional pension, but more likely the deduction will be disallowed along with every penalty known to the IRS?
I prefer to follow the law as opposed to engage in "financial fantasies" (this was the wording the court used in Neonatology)
Probs IRS
ReplyDelete412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS - La
Restricted Property Trusts
ReplyDeleteProtect Yourself From IRS Audits
HOME FILE FORM 8886 TODAY CONTACT US
Welcome To Our Website for professionals and business entities who must comply with new IRS Notice requirements.
Failing to File Form 8886 for Vebas like Sea Nine Veba, or any 419, section 79, small Captives, or Restricted Property Trusts, creates multiple penalties!
The Form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit program or 419 Plan.
If you are considering any of theses plans you need to take a few steps to protect yourself from potential audits from the IRS.
If you do not believe this Google Lance Wallach and whoever is advising you: YOU decide whom YOU Trust! Lance Wallach, National Society of Accountants, Speaker of the Year Member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i),419, Section 79, RPT, FBAR and Captive insurance plans.
Get Help Filing Form 8886 _ We make Filing This Form Painless!!! Get all Your Money Back From the IRS_ Protect Yourself from IRS Audits_ Call Today!
Need Help? Contact Us Today!
Office:516-938-5007 or Cell:516-236-8440
What to do if you have a 419 Plan
ReplyDeleteFIND MORE LEGAL ARTICLES
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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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return.
Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty
Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality.
With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS
As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
What to do if you have a 419 Plan
ReplyDeleteFIND MORE LEGAL ARTICLES
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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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return.
Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty
Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality.
With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS
As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
What to do if you have a 419 Plan
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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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return.
Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty
Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality.
With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS
As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
What to do if you have a 419 Plan
ReplyDeleteFIND MORE LEGAL ARTICLES
Type any word(s)
SEARCH
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.
A listed transaction refers to transactions that the IRS considers “abusive” and/or “tax shelters” transactions. Under applicable Treasury Regulations, taxpayers who enter into such transactions are required to notify the IRS each year by filing Form 8886 with their annual tax return. Those employers who do not file Form 8886 for a particular year are liable for a penalty under Section 6707A of the Code equal to the lesser of $200,000 or 75 percent of the amount of the decrease in tax occasioned by the listed transaction; this comes with a minimum penalty of $10,000. Individuals may also be liable for a tax equal to the lessor of $100,000 or 75 percent of the decrease in tax, with a minimum penalty of $5000. You may not amend you tax returns to file Form 8886 if one has not been filed with the initial return.
Those sponsors who are under audit by the IRS have reason for concern. In most cases there is typically room for some negotiation. In cases where the deduction is relatively small and the taxpayer was simply following the instructions of a promoter or tax professional, there is a possibility that the IRS can be convinced not to assert a listed transaction penalty
Taxpayers who fail to contact an experienced professional could get into a lot of trouble.All taxpayers, whether under audit or not, should take immediate steps to separate themselves from the Section 419 arrangement. Most plans will return benefits and/or policies to participating employers or eligible employees upon the employer’s withdrawal from participation. However, to the extent a tax deduction was taken for contributions to the plan, the employer or individual will incur taxable income and taxpayers need to plan for this eventuality.
With the assistance of knowledgeable Expert Witness, employers and business owners who participated in Section 419 arrangements can survive the ordeal with minimal cost and disruption to their business.
THE GOOD NEWS
As an expert witness Lance Wallach has never lost a case. Everyone that I have helped has been made whole!
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide le
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EMAIL EXCHANGE WITH IRS AGENT FROM VIDEO
The IRS agent pointed to in the video followed up with Lance after the AACPA convention
LANCE WALLACH SPEAKING AT ATTORNEY CPA CONVENTION ABOUT SECTION 79 PLANS
LANCE WALLACH AND THE IRS
SENT: THURSDAY,
June 04, 2009 11:43 AM
To: Itzkowitz Ronald R
Subject: Lance Wallach AAACPA meeting
When I met you at the meeting, I was the first speaker, I gave you some articles. I also then emailed them to you. I am following up to see if you can use any of them, or if you have suggestions for me. Look forward to teasing you the next time that I speak, and you are there. You are a good sport.
Lance Wallach
From: Ronald Itzkowitz
To:Lance Wallach
Sent: 6/4/2009 2:03 P.M.
Subj: RE: Lance Wallach AAACPA meeting
Hi Lance,
I did use the copies you gave me at the meeting, however, never received any emails. Would you be kind enough to re-send them to me.
Thank you,
Ronald R. Itzkowitz
National EP Customer Partnership Analyst
Internal Revenue Service - Employee Plans
Tax Expert Lance Wallach Speaking at Attorney... by lancewallachextra
Section 79 Help
From: Lance Wallach
Sent: Friday, December 23, 2011 8:46 AM
To: Jon Havicon
Subject: Re: IRC 79
Dear Jon:
Many of the promoters of sect.79 plans are the same people that promoted 419 and abusive 412i plans. Most of the abuses, as of the prior plans, are in the face to face selling.
Saying that the IRS approves the plans, putting large amounts of permanent life insurance in the plans and saying that it is deductible, etc. It is the same with the sales of captive insurance. They are telling the owners of the business that they can deduct large amounts of life insurance and in later years get the money out tax free. These promoters are a lot smarter about what they put in print, than in prior years. You may want to go on Google and type in Section 79 plans and see all the promoters and others.
In the 90s I warned about abusive 419 and 412i plans but the IRS did not do much to catch the abusers for years. In 2002 I spoke at ASPA in Washington, and then had a private meeting with senior IRS and Treasury officials which was arranged by the then acting IRS Comm. and arranged by MS. Gold, giving more details.
Then the IRS really started going after all of the abusive 419 and 412i plans.This is the same pattern today.
Lance Wallach
From: Jon Havicon
Sent: Friday, December 23, 2011 9:46 AM
To: Lance Wallach
Subject: Re: IRC 79
Thanks for the update. I'll forward to our Lead Development Center for further review.
Jon S. Havicon
IRS Agent
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restrictive property trust get audited without 8886 IRS form
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Published on January 27, 2017
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Stacey Arenas
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You would think after Neonatology v. Commissioner and the listed transaction rules under 6707A and IRC section 264 that people would stay away from 419 plans as an area where life insurance is tax deductible. But they do not.
Now comes the latest SCAM called "The Restrictive Property Trust"-a new model 419 SCAM which in conjunction with section 83 makes the insurance tax deductible going in and tax free coming out...with some modifications. The problem...it is a SCAM.
The Restrictive Property Trust
There is of course no such creature in the Internal Revenue Code. The promoter claims a patent-but tax strategy patents were outlawed in 2011 (maybe the promoter received a patent in 2010).
In any event the patent is worthless since the abundance of case law and dicta which struck down each and every 419 plan funded with life insurance (cannot get over 264). This was the "Grist Mill Trust"/SCAM which even had a favorable tax opinion from the largest law firm in New Jersey to the STEP plan/SCAM and countless others.
Non Legal opinion=WORTHLESS
All you have to do is read Barry v. Indianapolis Life. Non-Tax expert opinions are worthless. Next, I reviewed who is promoting this plan. A person who has a securities license. In court every thing he says is….worthless.
Final thoughts.
If you are thinking about selling the restrictive property trust-DO NOT. These plans make a BAD NAME for the insurance industry.
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Information about CJA and associates 419 plan lawsuits IRS audits was first submitted to Scambook on Dec 06, 2014.
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© 2023 by KEVIN WALKER. Proudly created with Wix.com
WHO I AM
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually. Mr. Wallach writes for over fifty publications including AICPA Planner, Accounting Today, CPA Journal, National Public Accountant, Enrolled Agents Journal, Financial Planning, Registered Representative, Tax Practitioners Journal, Connecticut Law Tribune, Barrister, CPA/Law Forum, Employee Benefit News, Health Underwriter, Advisor and the American Medical Association News. Mr. Wallach teaches accountants how to increase their clientele. Wallach has been featured on television and radio financial talk shows including NBC, National Pubic Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and his side has never lost a case. Visit Taxaudit419.com, Vebaplan.org and Taxadvisorexpert.com.
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© 2023 by KEVIN WALKER. Proudly created with Wix.com
WHO I AM
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually. Mr. Wallach writes for over fifty publications including AICPA Planner, Accounting Today, CPA Journal, National Public Accountant, Enrolled Agents Journal, Financial Planning, Registered Representative, Tax Practitioners Journal, Connecticut Law Tribune, Barrister, CPA/Law Forum, Employee Benefit News, Health Underwriter, Advisor and the American Medical Association News. Mr. Wallach teaches accountants how to increase their clientele. Wallach has been featured on television and radio financial talk shows including NBC, National Pubic Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and his side has never lost a case. Visit Taxaudit419.com, Vebaplan.org and Taxadvisorexpert.com.
Sea Nine FAQs Posted in Response to Legal Developments
ReplyDeleteIn response to recent developments in the
Notice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
ReplyDeleteWhen a Tax Court judge writes "purported" it generally means something like "Liar, liar pants on fire" or bovine excrement.
ReplyDeleteNorthwestern's conservatism in not getting caught up in the 419 mania is another mark in its favor.ther guises.
Companies who set up IRS Code Section 419 Welfare Benefit Plans that were funded by life insurance are finding they've got big problems. Although insurance agents told business owners that their contributions would be tax deductible, they're actually reportable transactions – which has left many companies owing taxes they simply can't pay.
ReplyDeleteWhat is a 419 welfare benefit plan?
A welfare benefit plan is effectively a corporate-sponsored insurance plan, according to Steve Burgess, an insurance expert on 412(i) pension and 419 welfare benefit plans. He explained, “A corporation sets up a trust to provide insurance benefits for its employees. That’s the basic concept behind it. The corporation's contributions into the trust are tax-deductible and many of these plans allow you to pick and choose which employees you want involved in the plan.”
Abuses with plans funded with life insurance
Burgess says that while not all of these plans bad, the ones that are bad are very abusive – and those generally happen with plans that are funded with life insurance and that are commission-driven. He told us:
Basically what happens is that an insurance agent comes to a business owner and says, 'Hey, I can put this plan in place for you. You can make contributions to it. I’ll set it up so that your money goes into this nice life insurance policy and it will all be tax-deductible to you. Then at some point in the future, you can borrow the money back and not pay any taxes on it.'
What people don't realize is that, again, like 412(i) plans (link to article entitled 412(i) Pension Plan Fraud: Schemes Motivated By Big Insurance Commissions), many of these plans are reportable transactions to the IRS and that they’re not always compliant with how a welfare benefit plan is supposed to be set up. They get audited by the IRS who tells them they're not going to allow it and that they're going to have to restate the income and pay taxes on it.
Two big issues surrounding 419 schemes
There are two big issues surrounding 419 schemes, according to Burgess – paying taxes on the plan and finding out that individuals and companies no longer have any rights in the policy. He explained each issue:
Paying taxes. Although somebody has spent a great deal of money to set this thing up, the IRS tells them, 'No, this doesn’t work.' They now have to report the money they put into the policy as income and they owe the taxes on it. However, the policy’s got a big surrender charge on it and you can’t just take the money out of the policy to pay the taxes because there’s not enough available to you. That's a very big issue.
No rights. The other issue is that once people get into these plans, they find out that the trust that was set up actually owns the policy, not the individual and not the corporation, and they no longer have any rights in that policy. So, they have to wait years and years and years to get anything back out.