Listed Transactions &419 Plans Litigation: March 2014

Listed Transactions &419 Plans Litigation: March 2014

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  1. Court Issues Mixed Ruling in Case of Abusive Tax Shelter Plan

    July 1, 2011 (PLANSPONSOR.com) – Claims against insurance companies, pension planners, financial advisers, accountants, attorneys, and other professionals who were involved with a company that adopted a pension plan later determined to be an abusive tax shelter are not time-barred.


    However, the Court of Appeal of the State of California Fourth Appellate District said Richard Kelter and Rio Vista West LLC failed to allege sufficient facts to state a breach of fiduciary duty claim against the plan co-developer Economic Concepts Inc. (ECI) or any claim against another co-developer Bryan Cave, both of which Kelter said participated in developing and marketing the pension plan and represented him in an IRS audit.

    A trial court found the statute of limitations barred Kelter’s lawsuit because his claims accrued when he established the pension plan and paid the first contribution. But the appellate court disagreed and concluded his claims did not accrue at that point because the contributions Kelter paid into the plan did not cause him any harm until the Internal Revenue Service made its final determination the plan c

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