IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme, such as accountants or lawyers. Just as important is the investigation of investors who knowingly participate in abusive tax schemes.
First the IRS started auditing § 419 plans in the 1990s, and then continued going after § 412(i) and other plans that they considered abusive, listed, or reportable transactions, or substantially similar to such transactions. If an IRS audit disallows the § 419 plan or the § 412(i) plan, not only does the taxpayer lose the deduction and pay interest and penalties, but then the IRS comes back under IRC 6707A and imposes large fines for not properly filing.
http://www.hg.org/article.asp?id=35505
Pac Life Suspends Sales of 79 Plans
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Pac Life Suspends Sales of Section 79 Plans
I just confirmed that Pacific Life Insurance suspended all sales of their “Section 79 Plan.”
Why are sales being suspended? I don’t have a definitive or “on the record” reason, but I’ve been told that the reason is IRS related.
Section 79 Plans are not worth Implementing regardless of any current IRS issues.
I’ve been warning about Section 79 Plans for several years. From a pure financial standpoint, I do not believe these plans are worth implementing. In fact, I was so disgusted with how these plans are sold that I created a consumer protection web-site (see www.section79plans.net which discusses in detail why I don’t like these plans). Keep in mind there is more than one company that sells Section 79 Plans.
Too much greed–-even though I’ve been warning about these plans for years, hundreds of agents continue to sell them. Why? Greed. Section 79 Plans pay some of the biggest commissions in the industry.
Clients are the losers–as is typically the case, if clients who have these plans get audited and if the IRS wins the audits or if most clients give in to avoid the costs and consequences of what could be a failed defense, they will lose.
Section 79 Plan EIUL policies are traditionally designed to not be very good from a cash accumulation standpoint. They are designed that way in order to “maximize the deduction.” I can’t imagine anyone buying a Section 79 EIUL policy unless they were getting a 30-40% deduction when buying it.
The consequence of negative audits is that clients are going to be stuck with not very good EIUL polices that essentially will have been funded with non-deductible dollars.
Pac Life Suspends Sales of 79 Plans
ReplyDeleteWhat are you waiting for?
Sign Up For More Information on Our 2 Day Training
Did you read last week’s newsletter titled: DOL Regs. Make Insurance Agents and Series 7 Licensed Advisors Fiduciaries? If not, click on the following link: http://www.pomplanning.net/dol-regs.
Pac Life Suspends Sales of Section 79 Plans
I just confirmed that Pacific Life Insurance suspended all sales of their “Section 79 Plan.”
Why are sales being suspended? I don’t have a definitive or “on the record” reason, but I’ve been told that the reason is IRS related.
Section 79 Plans are not worth Implementing regardless of any current IRS issues.
I’ve been warning about Section 79 Plans for several years. From a pure financial standpoint, I do not believe these plans are worth implementing. In fact, I was so disgusted with how these plans are sold that I created a consumer protection web-site (see www.section79plans.net which discusses in detail why I don’t like these plans). Keep in mind there is more than one company that sells Section 79 Plans.
Too much greed–-even though I’ve been warning about these plans for years, hundreds of agents continue to sell them. Why? Greed. Section 79 Plans pay some of the biggest commissions in the industry.
Clients are the losers–as is typically the case, if clients who have these plans get audited and if the IRS wins the audits or if most clients give in to avoid the costs and consequences of what could be a failed defense, they will lose.
Section 79 Plan EIUL policies are traditionally designed to not be very good from a cash accumulation standpoint. They are designed that way in order to “maximize the deduction.” I can’t imagine anyone buying a Section 79 EIUL policy unless they were getting a 30-40% deduction when buying it.
The consequence of negative audits is that clients are going to be stuck with not very good EIUL polices that essentially will have been funded with non-deductible dollars.
419e,412i,419,412,benefit plan penalties,audi... - vebaplan.org - Edit Remove
ReplyDelete[Reportable Transactions &419 Plans Litigation 419e,welfare,benefit,medical,retirement,plan,benefit,design,installation,strategies,pension,specialists,,412i Lawsuits,419 lawsuits,412i Help,419 Help, IRS Audits,412i Problems,412i problems, Expert Witness Lance Wallach,412i Help,419 Help, 412i lawsuits,419 lawsuits, Tuesday MSCPA -IRS Attacks Biz Owners 419, 412, Section 79 Lance Wallach MSCPA -IRS Attacks Biz Owners 419, 412, Section 79 Lance Wallach Posted by Lance Wallach at 7:36 AM Labels: 412, 419, IRS, Lance Wallach, Lance Wallach Expert Witness, section 79 1 comment: Lance Wallach said... "Niche" "Bisys" "Veba" "Doug Williams" "arch bonnema" "steve toth" "captive insurance" "michael sonnenberg" "ron snyder" "brian cave" "norm bevan" "doug williams" " williams coulson" "dennis cunning" "phil rowe" "sadi trust" "beta plan" "millennium plan" "grist mill trust" "compass welfare benefit plan" "sea nine" "professional benefits trust" "integrity 419" "integrity benefit plan" "veba plan" "sterling 419" "judy carsrud" By Lance Wallach October 23, 2010 Welfare benefit plans (419), 412i, captive insurance and Section 79 plans are under intense IRS scrutiny and no matter what plan you were in, you surely need help now. The IRS has been cracking down on 419, 412i, listed transactions and virtually all plans, making it difficult for anyone who has been involved with one of these plans. Listed below are some of the companies and names of salesmen,and others that you may recognize. Plan Names: Niche BiSYS Veba SADI trust Beta plan Millennium plan Grist Mill trust Compass welfare benefit plan Sea Nine veba Professional Benefits Trust Integrity 419 Integrity Benefit Plan Veba Plan Sterling 419 People, law firms, etc., affiliated with plans: Doug Williams Arch Bonnema Steve Toth Michael Sonnenberg Ron Snyder Brian Cave Norman Bevan Dennis Cunning Williams Coulson Phil Rowe Judy Carsrud Michael Lloyd Greeberg Tarig If you need help getting out ] Oct 5, 2015
Servicers for 419, 419e, 412i, Section... - vebaplan.org - Edit Remove
[Toolbox for Finance Topics Tax Blogs IRS Attacks Business Owners in 419, 412, Section 79 and Captive Insurance Plans Under Section 6707A Lance Wallach Jun 10, 2011 | Comments (3) inShare 70 1 Taxpayers who previously adopted 419, 412i, captive insurance or Section 79 plans are in big trouble. In recent years, the IRS has