tag:blogger.com,1999:blog-4462792519972887259.post1914975399077870609..comments2023-06-20T11:53:02.176-04:00Comments on We Want to Profile You in New Book: 412(I) Plans and and the IRS audits and lawsuits.irsdoghttp://www.blogger.com/profile/09151038267411467771noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-4462792519972887259.post-8914463130554863072021-09-10T10:35:51.374-04:002021-09-10T10:35:51.374-04:00LogoSupport and FAQs
Login Calendar View Forgot Pa...LogoSupport and FAQs<br />Login Calendar View Forgot Password<br />Don’t have an account? Create an account.<br />LIVE CPE WEBINARS<br />SELF-STUDY CPE<br />ARCHIVED WEBINARS<br />INSTRUCTORS<br />CONTACT US<br /><br />Lance Wallach<br />Lance Wallach<br />Author<br />wallachinc@gmail.com<br />(516) 938-5007<br /><br />Lancewallachlogo<br />Lance Wallach, 'National Society of Accountants Speaker of the Year', writes for 26 publications, has authored CPE books for the AICPA, Bisk Education, and used to speak at over 50 national annual conventions. As an expert witness, his side has never lost a case. Lance has appeared on radio and TV and is often quoted in the press. You could spend a week Googling Lance Wallach.<br />Archived Webinars Offered<br />HOW ACCOUNTANTS GET SUED BY THEIR CLIENTS AND FINED BY THE IRS<br />View Details<br />Date RecordedDecember 1, 2020 Cost$20.00 Course Length1.0 hour Subject AreaTaxes Course LevelBasic Instructional MethodGroup Internet Based PrerequisitesNone Advanced PreparationNone Who should attend?CPA - small firm, CPA - medium firm, CPA - large firm, Enrolled Agent, Other Lance Wallachhttps://www.blogger.com/profile/16209826219354033312noreply@blogger.comtag:blogger.com,1999:blog-4462792519972887259.post-16875283339218146462014-05-29T07:39:11.704-04:002014-05-29T07:39:11.704-04:00What are 412(i) Plans and what are the problems wi...What are 412(i) Plans and what are the problems with these plans <br /><br />412(i) is a provision of the tax code. A 412(i) plan is a defined pension plan. A 412(i) plan differs from other defined benefit pension plans in that it must be funded exclusively by the purchase of individual life insurance products (insurance and annuities). It provides specific retirement benefits to participants once they reach retirement and must contain assets sufficient to pay those benefits. To create a 412(i) plan, there must be a plan to hold the assets. The employer funds the plan by making cash contributions to the plan, and the Code allows the employer to take a tax deduction in the amount of the contributions, i.e. the entire amount.<br /><br />The plan uses the contributed funds to purchase some combination of life insurance products (insurance or annuities) for the plan. As the plan participants retire, the plan will usually sell the policies for their present cash value and purchase annuities with the proceeds. The revenue stream from the annuities pays the specified retirement benefit to plan participants.<br /><br />Where did the problems start?<br /><br />In the late 1990's brokers and promoters such as Kenneth Hartstein, Dennis Cunning, and others began selling 412(i) plans designed with policies created and sold through agents of Pacific Life, Hartford, Indianapolis life, and American General. These plans were sold or administered through companies such as Economic Concepts, Inc., Pension Professionals of America, Pension Strategies, L.L.C. and others.<br /><br />These plans were very lucrative for the brokers, promoters, agents, and insurance companies. In addition to the costs associated with administering the plans, the policies of insurance had high commissions and high surrender charges.<br /><br />These plans were often described as Pendulum Plans, or other similar names. In theory, the plans would work as follows. After the defined pension plan was set up, the plan would purchase a life insurance policy insuring the life of an individual. The plan would have no cash value (and high surrender charges) for 5 or more years. The Corporation would pay the premium on the policy and take a deduction for the entire amount. In year 5, when the policy had little or no cash value, the plan would transfer the policy to the individual, who would take it at a greatly reduced basis. Subsequently, the policy would bloom like a rose, and the individual would have a policy with significant cash value, which he or she could withdraw tax-free.<br /><br />Who signed off on the plan?<br /><br />Attorney Richard Smith at the law firm of Bryan Cave issued tax opinion letters opinion, which stated that many of the plans complied with the tax code.<br /><br />So what is the problem?<br /><br />In the early 2000s, IRS officials began questioning Richard Smith and others and giving speeches at benefits conferences wherein they took the position that these plans were in violation of both the letter and spirit of the Internal Revenue Code.<br /><br />In February 2004, the IRS issued guidance on 412(i) and began the process of making plans "listed transactions." Taxpayers involved in listed transaction are required to reLance Wallachhttps://www.blogger.com/profile/05541601942749133861noreply@blogger.comtag:blogger.com,1999:blog-4462792519972887259.post-37731376498111416242014-05-06T12:54:40.711-04:002014-05-06T12:54:40.711-04:00
Abusive Insurance and Retirement Plans
Analysis ... <br />Abusive Insurance and Retirement Plans<br />Analysis Of<br />Abusive Insurance and Retirement Plans <br /><br /><br /> Lance Wallach Council Member President, VEBA Plan <br /> <br />December 16, 2009 <br /><br /><br /><br />Premise<br />■ Some of the listed transactions CPA tax practitioners are most likely to encounter are employee benefit insurance plans that the IRS has deemed abusive.■ As long ago as 1984, with the addition of IRC §§ 419 and 419A, Congress and the IRS took aim at unduly accelerated deductions and other perceived abuses. ■ The new “more likely than not” penalty standard for tax preparers under IRC § 6694 Failure to disclose a listed transaction carries particularly severe potential penalties. <br /><br /><br /><br />Discussion<br />Single-employer section 419 welfare benefit plans are the latest incarnation in insurance deductions the IRS deems abusive.<br />By Lance Wallach<br />Parts of this article are from the AICPA CPE self-study course Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots, by Sid Kess, authored by Lance Wallach.<br />Many of the listed transactions that can get your clients into trouble with the IRS are exotic shelters that relatively few practitioners ever encounter. When was the last time you saw someone file a return as a Guamanian trust (Notice 2000-61)? On the other hand, a few listed transactions concern relatively common employee benefit plans the IRS has deemed tax-avoidance schemes or otherwise abusive. Perhaps some of the most likely to crop up, especially in small business returns, are arra<br /><br />Lance Wallachhttps://www.blogger.com/profile/05541601942749133861noreply@blogger.comtag:blogger.com,1999:blog-4462792519972887259.post-24998781419060169612014-04-10T08:41:20.035-04:002014-04-10T08:41:20.035-04:00Abusive Tax Shelters
412i, 419e plans litigation a...Abusive Tax Shelters<br />412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.<br /><br />Tuesday, April 19, 2011<br /><br />Lance Wallach tells national radio audience how IRS can collect billions by eliminating its bureaucracy & incompetence & going after the real culprits<br />Click hear to listen to the radio interview on this subject.<br /><br />Lance Wallach, National Society of Accountants Speaker of the Year and member of the American Institute of CPAs faculty of teaching professionals, is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He speaks at more than ten conventions annually and writes for over fifty publications. 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 AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case. Mr. Wallach may be reached at 516/938.5007, wallachinc@gmail.com, or at www.taxaudit419.com or www.lancewallach.com.lance wallachhttps://www.blogger.com/profile/05381002998730283542noreply@blogger.com