Follow the plan and get audited.
What is a Section 79 Plan?Protection, Retirement, Innovation. A permanent benefit life insurance plan (using IRS codes) that can add substantial retirement income via sheltered cash accumulation and protection to the business owner(s) as well as the employees at a minimal cost and in a tax-advantaged way.
Why Would A Company (and a Business Owner) Want to Implement a Section 79 Plan*?
1. Additional Permanent Life Insurance Protection
2. No Limits on Funding
3. Tax-Deferred Growth of Funds
4. Employee Benefit with Minimal Costs
5. Tax Deductabilty of Plan
6. Income-Tax Free Survivor Benefit
7. Distances Assets from Company Creditors
8. Program Supported by Specific IRS Tax Code and Regulations
1. Additional Permanent Life Insurance Protection
2. No Limits on Funding
3. Tax-Deferred Growth of Funds
4. Employee Benefit with Minimal Costs
5. Tax Deductabilty of Plan
6. Income-Tax Free Survivor Benefit
7. Distances Assets from Company Creditors
8. Program Supported by Specific IRS Tax Code and Regulations
Structure:
FOR THE BUSINESS OWNER AND KEY EMPLOYEES
Sponsored Group Life Insurance Policy (permanent
life) on behalf of the business owner or key employee
Insuring Key Employee's Life
or Key Employee
Employee's Beneficiary
Retirement Income♣
FOR EMPLOYEES
- Business Implements Group Life Insurance Plan. Employee Chooses Type and Benefit Amount.
- Typically, most employees select only $50,000 of Group Term Insurance Coverage Under the Plan (minimal cost).
- Company Pays Tax Deductible Premium for Employee(s) Selected Life Insurance Policy
- Employee Recognizes an "Economic Benefit" as Taxable Income (on policys > $50,000 Death Benefit) and Owns the Insurance Policy
- Death Benefit's Paid Income-Tax Free to Employee's Named Beneficiaries
- If the Employee Selects a Permanent Life Insurance Policy, the Employee Can Withdraw Excess Cash Value Income-Tax Free (Policy Loan) for Retirement Income.
Form 8886 & 419 Litigation Plans
ReplyDelete412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.
Wednesday, February 5, 2014
Business Owners in 419, 412i, Section 79 and Captive Insurance Plans Will Probably Be Fined by the IRS Under Section 6707A
Business Owners in 419, 412i, Section 79 and Captive Insurance Plans Will Probably Be Fined by the IRS Under Section 6707A
Posted on December 27, 2011, in Uncategorized, with 4 Comments
Business Owners in 419, 412i, Section 79 and Captive Insurance Plans Will Probably Be Fined by the IRS Under Section 6707A
by Lance Wallach
Taxpayers who previously adopted 419, 412i, captive insurance or Section 79 plans are in big trouble. In recent years, the IRS has identified many of these arrangements as abusive devices to funnel tax deductible dollars to shareholders and classified these arrangements as “listed transactions.” These plans were sold by insurance agents, financial planners, accountants and attorneys seeking large life insurance commissions. In general, taxpayers who engage in a “listed transaction” must report such transaction to the IRS on Form 8886 every year that they “participate” in the transaction, and the taxpayer does not necessarily have to make a contribution or claim a tax deduction to be deemed to participate. Section 6707A of the Code imposes severe penalties ($200,000 for a business and $100,000 for an individual) for failure to file Form 8886 with respect t
Internal Revenue Code Section 79
ReplyDeletewww.section79.info/
Internal Revenue Code Section 79, Tax Deductible Permanent Life Insurance Plans, and Tax Deductible Group Term Life Insurance.
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