412i, 419e plans litigation and IRS Audit Experts for abusive insurance reportable or listed transactions by the IRS,Section 79, Section 79 Lawsuits,412i
Showing posts with label Section 79 Plan. Show all posts
Showing posts with label Section 79 Plan. Show all posts
Tuesday, May 30, 2017
Reportable Transactions & 419 Plans Litigation: CJA and associates 419 412i section 79 scam audits...
Reportable Transactions & 419 Plans Litigation: CJA and associates 419 412i section 79 scam audits...: CJA and associates 419 412i section 79 scam audits lawsuits
Three people and a company are suing over claims they were recommended unsuitable employee benefit programs.
Life insurance company, others sued over employee benefit programs
Three people and a company are suing over claims they were recommended unsuitable employee benefit programs.
Stephen McClure, Mark McClure, Carolyn Robinson and International Plastics Inc. filed a lawsuit Nov. 25 in the Cook County Circuit Court against Fidelity Security Life Insurance Co., CJA & Associates Inc., Raymond Ankner, Fifth Third Bank, Jason Freeman and J. Freeman & Associates Inc.
The suit alleges common law fraud, negligence, negligent misrepresentation and unjust enrichment, among other claims.
According to the complaint, the defendants used a pre-packaged program designed and administered to induce the plaintiffs to establish employee benefit programs.
The plaintiffs claim the pre-packaged recommendations promised they would receive tax breaks for their business and secure large retirement benefits for plan participants.
They claim the defendants knew or should have known the investments they recommended were wholly unsuitable and the cost far exceeded any potential benefits.
The plaintiffs are seeking more than $50,000 in damages and are being represented in the case by Anthony R. Rutkowski of Rutkowski Law Group in Chicago.
Cook County Circuit Court Case No. 2013L013514.
This is a report on a civil lawsuit filed at the Cook County Courthouse. The details in this report come from an original complaint filed by a plaintiff. Please note that a complaint represents an accusation by a private individual, not the government. It is not an indication of guilt, and it represents only one side of the story.
What is a Section 79 Plan?
INTRODUCTION
What is a Section 79 Plan?
A Section 79 Plan is offered under Section 79 of the Internal Revenue Code. A group-term life insurance plan which otherwise qualifies under Section 79 of the Internal Revenue Code may provide term life insurance and Permanent Benefits. Premiums paid by an employer for life insurance on behalf of an employee are deductible by the employer (provided the employer is not directly or indirectly a beneficiary of the policy), and such amounts generally constitute additional compensation to the employee which must be reported.
Under Code Section 79, a corporation can provide up to $50,000 of group-term life insurance for an employee on a tax deductible basis with no increase in the employee’s gross income. Any amount of group-term life insurance in excess of $50,000 is taxable to the employee and must be reported by the employer on the employee’s W-2 as “other compensation” as described under Code Section 6052. Any life insurance, which has a cash value, will also result in additional taxable income and must be reportedby the employer on the employee’s W-2.
Coverage must be provided under a formula based on factors such as age, years of service, compensation, or position. The amount of insurance provided an employee under such a schedule must, however, be computed under a formula which precludes individual selection.
Important: *Owner Participation
In accordance with the Internal Revenue Code, Section 79 Plan states that only “employees” may participate. The term “employees” does not include self-employed individuals or 2% shareholders of an S Corporation, LLC taxed as a Partnership or a Partnership. The Internal Revenue Service rules governing owner participation in your Section 79 Plan are as follows:
Type of Business Participation Rules
C Corporation/LLC taxed as a C Corporation: Owners, who are employees, who meet the eligibility requirements of the Plan may participate
S Corporation/Partnerships/LLP: Any employee who owns more than 2% of the stock or possesses more than 2% of the total combined voting power of all the stock cannot participate.**
Sole Proprietor: A sole proprietor cannot participate.
** Remember that, for purposes of determining ownership, the stock ownership/attribution rules provide that an individual is considered as owning the stock owned, directly or indirectly, by his or her spouse (other than a spouse who is legally separated from the individual under decree of divorce or separate maintenance), children, grandchildren, and parents.
DISCRIMINATION
Corporations with 10 or more employees
? Must cover at least 10 employees
? Group must be comprised of 85% non-key employees or cover 70% of all full time
employees
? Death benefit must be based on a formula that precludes individual selection and on
something related to employment (years of service, income, job description, location,
etc.)
? The penalty for being a discriminatory plan is the loss of the exclusion from income of
the cost for the first $50,000 of term insurance for key employees
Corporations with fewer than 10 employees
? Coverage must be offered to all full time employees with 6 months or more of service
? Coverage must be provided as a multiple of income or a flat death benefit amount, or
coverage brackets in which there is no more than 2 ½ times between coverage brackets
and 10x between top to bottom
? Underwriting must be based on a non-medical questionnaire only
A note about Controlled Groups and Affiliated Service Groups
Two or more employers must be included under one Section 79 Plan if they are members of a
“controlled group” or an “affiliated service group,” as defined in the Internal Revenue Code and
related regulations. A simplified description of a controlled group of corporations is as follows:
A “parent-subsidiary” controlled group exists where there are one or more chains of subsidiary
corporations connected through ownership with a common parent and (a) 80% or more (by value
or voting power) of each corporation is owned (both directly and through option rights) by one or
more of the other corporations; and (b) the common parent owns (both directly and through
option rights) at least 80% (by value or voting power) of at least one of the other corporations. A
“brother-sister” controlled group exists where five or fewer persons own stock possessing; (a)
80% or more (by value or voting power) of each corporation; and (b) more than 50% (by value
or voting power) of each corporation when taking into account each stockholder’s interest only
to the extent that he has identical interests in each corporation. (A stockholder’s interest is only
considered for purposes of the 80% test if he owns at least some interest in each corporation in
the group.) Controlled groups and affiliated service groups can also exist among other types of
businesses, such as partnerships and sole proprietorships, in which case the determination is
made on the basis of other types of ownership interests
Section 79 by Lance Wallach, expert witness.
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company).
Beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees.
Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees
Group underwriting for businesses of 10 employees or less
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company). Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
Roccy is a good man and the author of the above article. I did not copy the entire article. I only copied the first page. Roccy D is a very smart man who is aware of the problems with abusive tax shelters including 412i 419 and the new abusive section 79 plans. It seems that over the years he and I have attacked abusive 419 and 412i plans, while everyone else was selling them. Now he and I are warning about section 79 scams.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees.
Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees
Group underwriting for businesses of 10 employees or less
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company). Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
Roccy is a good man and the author of the above article. I did not copy the entire article. I only copied the first page. Roccy D is a very smart man who is aware of the problems with abusive tax shelters including 412i 419 and the new abusive section 79 plans. It seems that over the years he and I have attacked abusive 419 and 412i plans, while everyone else was selling them. Now he and I are warning about section 79 scams.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Hard to believe a CPE program on this scam?
A Section 79 plan offers employers an opportunity to purchase life insurance for employees on a tax-advantaged basis. This type of plan is especially advantageous because executives may exclude a portion (generally 35-40%) of the employer contribution from income, they receive an income tax deduction at the corporate level, and a higher percentage of the plan cost is allocated to key employees. Financial Expert Roie Raitses examines how Section 79 plans can help attract and retain key employees, provide supplementary retirement income and how they offer a limited funding commitment.
Learning Objectives:
I. Understand how a Section 79 Plan works.
II. Know the employer benefits to using a Section 79 plan.
III. Identify various strategies depending on the circumstances.
II. Know the employer benefits to using a Section 79 plan.
III. Identify various strategies depending on the circumstances.
NASBA Instruction Method: Self-Study
Hard to believe a CPE program on this scam?
Section 79 by Lance Wallach, expert witness.
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company).
Beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees.
Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees
Group underwriting for businesses of 10 employees or less
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company). Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
Roccy is a good man and the author of the above article. I did not copy the entire article. I only copied the first page. Roccy D is a very smart man who is aware of the problems with abusive tax shelters including 412i 419 and the new abusive section 79 plans. It seems that over the years he and I have attacked abusive 419 and 412i plans, while everyone else was selling them. Now he and I are warning about section 79 scams.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
Beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees.
Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
beginning this article, I wanted to reiterate my comments on implementing plans with fewer than 10 employees
Group underwriting for businesses of 10 employees or less
For businesses with 10 or fewer employees, the law prohibits full medical underwriting of the policies that are issued ("group" underwriting is required, which is much more risky for an insurance company). Amazingly, one of the insurance companies offering this plan seemly doesn't have the ability to issue non-medical underwriting policies. This is laughable and pathetic all at the same time, and a plan you'll want to stay far away from.
As I briefly alluded to in my previous article, one of the reasons I really do not like Section 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 in term instead of a policy with several hundred thousands of dollars or even millions of dollars in death benefits? Because employees who are provided death benefits by an employer in excess of $50,000 are taxed on the additional benefit on an annual basis (and it increases every year).
Roccy is a good man and the author of the above article. I did not copy the entire article. I only copied the first page. Roccy D is a very smart man who is aware of the problems with abusive tax shelters including 412i 419 and the new abusive section 79 plans. It seems that over the years he and I have attacked abusive 419 and 412i plans, while everyone else was selling them. Now he and I are warning about section 79 scams.
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
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