Captive Insurance Plans Skip to content Home About ← The Irrevocable Trust Cash Release ProgramLance Wallach Life Insurance: Captive Insurance Buyer Beware → Big Trouble Ahead For Many 419 Welfare Benefit Plan and 412i Retirement Plan Participants Posted on July 7, 2014 by captiveinsuranceplans Big Trouble Ahead For Many 419 Welfare Benefit Plan and 412i Retirement Plan Participants
Aug 25, 2010 By Lance Wallach
Business owners and professionals who have adopted 419 welfare benefit plan arrangements are in serious trouble. The IRS has attacked these arrangements as “listed transactions.” Business owners who engage in a “listed transaction” must report such transactions on IRS Form 8886 every year that they are participating in the transaction, and you are participating even in years when you do not make any contribution. Internal Revenue Code 6707A imposes severe penalties ($200,000 annually for a business and $100,000 per year for an individual) for failure to file Form 8886 with respect to a listed transaction. Tax Court, according to both the IRS Appeals Office and its own decisions, does not have jurisdiction to abate or lower any penalties imposed by the IRS. Complaints caused Congress to impose a moratorium on collection of Section 6707A penalties. On June 1, 2010, the moratorium ended, and the IRS immediately began sending out notices warning of possible imposition of 6707A penalties. When you get this notice it should be taken very seriously.
Accountants were required to properly prepare and file Form 8918 (if they signed and/or prepare tax returns and got paid). The penalty for accountants for not properly filing the forms is $100,000, or $200,000 if they are incorporated.
Friday, July 25, 2014 412i plan problems or 412i problem go on the net for lance wallach or 412i… 412i plan problems or 412i problem go on the net for lance wallach or 412i… Posted by lance wallach at 6:57 AM Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
llance wallachAugust 12, 2014 at 1:02 PM IRS 412(i) Audit Initiative: Are All the Plans Bad?
In the second case, the plan was funded exclusively with flexible premium annuity contracts – no life insurance of the type the IRS considers “abusive” (i.e., policies with high initial surrender charges). As in the first case, the carrier provided a rider to the contracts conforming them to the requirements of section 412(i). The annuity contracts were applied for in 2003, the first plan year, but were not signed and the first premiums were not paid until March of 2004. The insurance carrier has confirmed that the contract was in effect in 2003, per an oral binder given by the agent to the plan.
After more than 18 months of protracted discussion, provision of voluminous documentation and detailed analyses of the legal authorities and the facts of the case, the IRS has conceded all issues except for one: was the annuity contract in effect for the first year of the plan? We have pointed out that there is nothing in the Code or the regulations that requires that the annuity contract be signed or the premium paid before the end of the first plan year. The Code simply states that the contract must commence with the date the participant enters the plan, and the carrier is prepared to certify that this was the case. The contract commences when the carrier certifies that there is coverage, not up
Friday, July 25, 2014 412i plan problems or 412i problem go on the net for lance wallach or 412i… 412i plan problems or 412i problem go on the net for lance wallach or 412i… Posted by lance wallach at 6:57 AM Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
llance wallachAugust 12, 2014 at 1:02 PM IRS 412(i) Audit Initiative: Are All the Plans Bad?
In the second case, the plan was funded exclusively with flexible premium annuity contracts – no life insurance of the type the IRS considers “abusive” (i.e., policies with high initial surrender charges). As in the first case, the carrier provided a rider to the contracts conforming them to the requirements of section 412(i). The annuity contracts were applied for in 2003, the first plan year, but were not signed and the first premiums were not paid until March of 2004. The insurance carrier has confirmed that the contract was in effect in 2003, per an oral binder given by the agent to the plan.
After more than 18 months of protracted discussion, provision of voluminous documentation and detailed analyses of the legal authorities and the facts of the case, the IRS has conceded all issues except for one: was the annuity contract in effect for the first year of the plan? We have pointed out that there is nothing in the Code or the regulations that requires that the annuity contract be signed or the premium paid before the end of the first plan year. The Code simply states that the contract must commence with the date the participant enters the plan, and the carrier is prepared to certify that this was the case. The contract commences when the carrier certifies that there is coverage, not up
Enter your comment here Structures Reviewed Proposals Reviewed IRS Audits Defended CPA,MBA,EA with 37 Years Experience at the IRS Structures Reviewed Proposals Reviewed IRS Audits Defended CPA,MBA,EA with 37 Years Experience Financial and Insurance Experts Former IRS Agents Certified Fraud Examiners CPAs Other Leading Authorities on Insurance and Taxation issues Fellow professional? Want to get published? CLICK HERE EXPERT WITNESS SERVICES 516 938 -5007 516 935-7346 To e-mail Lance Wallach CLICK HERE NATIONAL OFFICES
Enter your comment here Structures Reviewed Proposals Reviewed IRS Audits Defended CPA,MBA,EA with 37 Years Experience at the IRS Structures Reviewed Proposals Reviewed IRS Audits Defended CPA,MBA,EA with 37 Years Experience Financial and Insurance Experts Former IRS Agents Certified Fraud Examiners CPAs Other Leading Authorities on Insurance and Taxation issues Fellow professional? Want to get published? CLICK HERE EXPERT WITNESS SERVICES 516 938 -5007 516 935-7346 To e-mail Lance Wallach CLICK HERE NATIONAL OFFICES
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Big Trouble Ahead For Many 419 Welfare Benefit Plan and 412i Retirement Plan Participants
Posted on July 7, 2014 by captiveinsuranceplans
Big Trouble Ahead For Many 419 Welfare Benefit Plan
and 412i Retirement Plan Participants
Aug 25, 2010
By Lance Wallach
Business owners and professionals who have adopted 419 welfare benefit plan arrangements are
in serious trouble. The IRS has attacked these arrangements as “listed transactions.” Business
owners who engage in a “listed transaction” must report such transactions on IRS Form 8886
every year that they are participating in the transaction, and you are participating even in years
when you do not make any contribution. Internal Revenue Code 6707A imposes severe penalties
($200,000 annually for a business and $100,000 per year for an individual) for failure to file
Form 8886 with respect to a listed transaction. Tax Court, according to both the IRS Appeals
Office and its own decisions, does not have jurisdiction to abate or lower any penalties imposed
by the IRS. Complaints caused Congress to impose a moratorium on collection of Section
6707A penalties. On June 1, 2010, the moratorium ended, and the IRS immediately began
sending out notices warning of possible imposition of 6707A penalties. When you get this notice
it should be taken very seriously.
Accountants were required to properly prepare and file Form 8918 (if they signed and/or
prepare tax returns and got paid). The penalty for accountants for not properly filing the forms
is $100,000, or $200,000 if they are incorporated.
Friday, July 25, 2014
ReplyDelete412i plan problems or 412i problem go on the net for lance wallach or 412i…
412i plan problems or 412i problem go on the net for lance wallach or 412i…
Posted by lance wallach at 6:57 AM
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Labels: 412i plans, 419e, 419e help, expert witness, irs audit, Lance Wallach, lance wallach expert witness
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llance wallachAugust 12, 2014 at 1:02 PM
IRS 412(i) Audit Initiative: Are All the Plans Bad?
In the second case, the plan was funded exclusively with flexible premium annuity contracts – no life insurance of the type the IRS considers “abusive” (i.e., policies with high initial surrender charges). As in the first case, the carrier provided a rider to the contracts conforming them to the requirements of section 412(i). The annuity contracts were applied for in 2003, the first plan year, but were not signed and the first premiums were not paid until March of 2004. The insurance carrier has confirmed that the contract was in effect in 2003, per an oral binder given by the agent to the plan.
After more than 18 months of protracted discussion, provision of voluminous documentation and detailed analyses of the legal authorities and the facts of the case, the IRS has conceded all issues except for one: was the annuity contract in effect for the first year of the plan? We have pointed out that there is nothing in the Code or the regulations that requires that the annuity contract be signed or the premium paid before the end of the first plan year. The Code simply states that the contract must commence with the date the participant enters the plan, and the carrier is prepared to certify that this was the case. The contract commences when the carrier certifies that there is coverage, not up
Friday, July 25, 2014
ReplyDelete412i plan problems or 412i problem go on the net for lance wallach or 412i…
412i plan problems or 412i problem go on the net for lance wallach or 412i…
Posted by lance wallach at 6:57 AM
Email This
BlogThis!
Share to Twitter
Share to Facebook
Share to Pinterest
Labels: 412i plans, 419e, 419e help, expert witness, irs audit, Lance Wallach, lance wallach expert witness
1 comment:
llance wallachAugust 12, 2014 at 1:02 PM
IRS 412(i) Audit Initiative: Are All the Plans Bad?
In the second case, the plan was funded exclusively with flexible premium annuity contracts – no life insurance of the type the IRS considers “abusive” (i.e., policies with high initial surrender charges). As in the first case, the carrier provided a rider to the contracts conforming them to the requirements of section 412(i). The annuity contracts were applied for in 2003, the first plan year, but were not signed and the first premiums were not paid until March of 2004. The insurance carrier has confirmed that the contract was in effect in 2003, per an oral binder given by the agent to the plan.
After more than 18 months of protracted discussion, provision of voluminous documentation and detailed analyses of the legal authorities and the facts of the case, the IRS has conceded all issues except for one: was the annuity contract in effect for the first year of the plan? We have pointed out that there is nothing in the Code or the regulations that requires that the annuity contract be signed or the premium paid before the end of the first plan year. The Code simply states that the contract must commence with the date the participant enters the plan, and the carrier is prepared to certify that this was the case. The contract commences when the carrier certifies that there is coverage, not up
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Structures Reviewed
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IRS Audits Defended
CPA,MBA,EA with 37 Years Experience
Financial and Insurance Experts
Former IRS Agents
Certified Fraud Examiners
CPAs
Other Leading Authorities on Insurance and Taxation issues
Fellow professional?
Want to get published?
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Enter your comment here
Structures Reviewed
Proposals Reviewed
IRS Audits Defended
CPA,MBA,EA with 37 Years Experience at the IRS
Structures Reviewed
Proposals Reviewed
IRS Audits Defended
CPA,MBA,EA with 37 Years Experience
Financial and Insurance Experts
Former IRS Agents
Certified Fraud Examiners
CPAs
Other Leading Authorities on Insurance and Taxation issues
Fellow professional?
Want to get published?
CLICK HERE
EXPERT WITNESS SERVICES
516 938 -5007
516 935-7346
To e-mail Lance Wallach
CLICK HERE
NATIONAL OFFICES
SUBMIT YOUR REQUEST HERE
SECTION
79
PROBLEM