Showing posts with label Lance Wallach Expert Witness. Show all posts
Showing posts with label Lance Wallach Expert Witness. Show all posts
Captive Insurance
Most accountants and small business owners are unfamiliar with a great way to reduce taxes and expenses. By either creating or sharing "a captive insurance company", substantial tax and cost savings willbenefit the small business owner. Over 80% of Fortune 500 companies take advantage of some kind of captive insurance company arrangement. They set up their own insurance companies to provide coverage when they think outside insurers are charging too much, or coverage is simply unavailable. The parentcompany creates a captive so that it has a self-financing option for buying insurance. The captive then either retains the risk of providing insurance or pays reinsurers (companies that reinsure insurers) to take the risk.
IRS Issues Final Regulations for Material Advisors, Accountants, Attorneys and Insurance Agents - HG.org
IRS Issues Final Regulations for Material Advisors, Accountants, Attorneys and Insurance Agents - HG.org
If you sold, advised on or had anything to do with a listed transaction you will be fined by the IRS. For those that bought listed transactions like, 419 welfare benefit plans or 412i plans, you have been or will also be fined.
On July 30, 2014, the Internal Revenue Service issued final regulations regarding the imposition of penalties under Internal Revenue Code section 6707 against material advisors who fail to file true, complete or timely disclosure returns with respect to reportable or listed transactions. The effective date of the final regulations is July 31, 2014.
No Shelter Here: Beware of These Insurance Plans | Remodeling
No Shelter Here: Beware of These Insurance Plans | Remodeling
During the past few years, the Internal Revenue Service (IRS) has fined many business owners hundreds of thousands of dollars for participating in several particular types of insurance plans.
The 412(i), 419, captive insurance, and section 79 plans were marketed as a way for small-business owners to set up retirement, welfare benefit plans, or other tax-deductible programs while leveraging huge tax savings, but the IRS put most of them on a list of abusive tax shelters, listed transactions, or similar transactions, etc., and has more recently focused audits on them. Many accountants are unaware of the issues surrounding these plans, and many big-name insurance companies are still encouraging participation in them.
Instructions for Form 8918
www.irs.gov/pub/irs-pdf/i8918.pdf
The link will take you to Instructions for Form 8918, or in other words, a Material Advisor Disclosure Statement.
The link will take you to Instructions for Form 8918, or in other words, a Material Advisor Disclosure Statement.
SSI Disability Advocates
SSI Disability Advocates
Lance Wallach's office is nationally recognized as experts in retirement, pension & health care issues facing many Americans with disabilities that prevent them from working.
Mr. Wallach and his team of highly experienced lawyers, pension experts & health care professionals can help you obtain the SSI and Disability benefits that you are entitled to!
Transfer Pricing
The IRS dedicates enormous resources toward dealing with taxpayer’s who are involved with any form of transfer pricing. The transfer pricing provisions of IRC 482 address four general types of transactions between commonly owned or controlled parties.
1- Use or transfer of tangible property
2- Services
3- Loans
4- Use or transfer of intangible property (especially cost sharing agreements)
Use of tangible property: When one member of a controlled group rents or leases property to another member of the group, the price paid for use of such property must equal an arm’s length amount. Per Treas. Reg. 1.482-2(c )(2)(i), the arm’s length amount is determined by reference to the amount that would have been charged between independent parties for use of the same or similar property under similar circumstances.
Before you buy you should know section 79 Plan history
Section 79 Scams and Captive Insurance HistoryWhen trying to understand how a product becomes a target of government scrutiny it helps to know its history.
In the case of plans that fall under Internal Revenue Code Section 79, that history is complex.
Insurance companies, agents, financial planners, and others have pushed abusive 419 and 412i plans for
years. They claimed business owners could obtain large tax deductions. Insurance companies, agents and
others earned very large life insurance commissions in the process. Eventually, the IRS cracked down on the
unsuspecting business owners. Not only did they lose the tax deductions, but they were also fined, in addition
to being charged penalties and interest. A skilled CPA with extensive IRS experience could usually eliminate
the penalties and reduce the fines. Most accountants, tax attorneys and others have been unsuccessful in
accomplishing this.
After the business owner was assessed the fines and lost his tax deduction, he had another huge, unforeseen
problem. The IRS then came back and fined him a huge amount of money for not telling on himself under IRC
6707A. If you participate in a listed or reportable transaction, you must alert the IRS or face a large fine. In
essence, you must alert the IRS if you were in a transaction that has the possibility of tax avoidance or
evasion. Not only must you file Form 8886 telling on yourself, but the form needs to be filed properly, and
done every year that you are in the plan in any way at all, even if you are no longer making contributions.
According to IRC 6707A Expert Lance Wallach, "I have received hundreds of phone calls from business
owners who filed Form 8886, usually with the help of their accountants or the plan promoter. They got the fine
for either improperly filing, or for making mistakes on the form."
"The IRS directions about preparing the form are vague, especially if the form is filed late. They presume a
timely filing. In addition, many states also require forms to be filed. For example, if you work in New York State
and manage to properly fill out the Federal form, but do not file the State form, you may still get fined," says
Wallach, adding that he only knows of two people that know how to properly prepare and file the forms,
especially forms being filed late. As an expert witness in such cases, Lance Wallach’s side has never lost.
The result of the all of the above was many lawsuits against insurance companies, including Hartford, Pacific
Life, Indianapolis Life, AIG, and Penn Mutual, to name just a few. Agents, accountants, and attorneys were
also successfully sued.
Read the whole thing here
In the case of plans that fall under Internal Revenue Code Section 79, that history is complex.
Insurance companies, agents, financial planners, and others have pushed abusive 419 and 412i plans for
years. They claimed business owners could obtain large tax deductions. Insurance companies, agents and
others earned very large life insurance commissions in the process. Eventually, the IRS cracked down on the
unsuspecting business owners. Not only did they lose the tax deductions, but they were also fined, in addition
to being charged penalties and interest. A skilled CPA with extensive IRS experience could usually eliminate
the penalties and reduce the fines. Most accountants, tax attorneys and others have been unsuccessful in
accomplishing this.
After the business owner was assessed the fines and lost his tax deduction, he had another huge, unforeseen
problem. The IRS then came back and fined him a huge amount of money for not telling on himself under IRC
6707A. If you participate in a listed or reportable transaction, you must alert the IRS or face a large fine. In
essence, you must alert the IRS if you were in a transaction that has the possibility of tax avoidance or
evasion. Not only must you file Form 8886 telling on yourself, but the form needs to be filed properly, and
done every year that you are in the plan in any way at all, even if you are no longer making contributions.
According to IRC 6707A Expert Lance Wallach, "I have received hundreds of phone calls from business
owners who filed Form 8886, usually with the help of their accountants or the plan promoter. They got the fine
for either improperly filing, or for making mistakes on the form."
"The IRS directions about preparing the form are vague, especially if the form is filed late. They presume a
timely filing. In addition, many states also require forms to be filed. For example, if you work in New York State
and manage to properly fill out the Federal form, but do not file the State form, you may still get fined," says
Wallach, adding that he only knows of two people that know how to properly prepare and file the forms,
especially forms being filed late. As an expert witness in such cases, Lance Wallach’s side has never lost.
The result of the all of the above was many lawsuits against insurance companies, including Hartford, Pacific
Life, Indianapolis Life, AIG, and Penn Mutual, to name just a few. Agents, accountants, and attorneys were
also successfully sued.
Read the whole thing here
Investment News - Lance Wallach - 412i and 419 plan litigatation
- Investment News
Financial advisors who have sold certain types of retirement and other benefit plans to small businesses might soon be facing a wave of lawsuits — unless Congress decides to take action soon.
For years, advisors and insurance brokers have sold the 412(i) plan, a type of defined-benefit pension plan, and the 419 plan, a health and welfare plan, to small businesses as a way of providing such benefits to their employees, while also receiving a tax break.
However, in 2004, Congress changed the law to require that companies file with the Internal Revenue Service if they had these plans in place. The law change was intended to address tax shelters, particularly those set up by large companies.
Many companies and financial advisors didn't realize that this was a cause for concern, however, and now employers are receiving a great deal of scrutiny from the federal government, according to experts.
The IRS has been aggressive in auditing these plans. The fines for failing to notify the agency about them are $200,000 per business per year the plan has been in place and $100,000 per individual.
So advisors who sold these plans to small businesses are now slowly starting to become the target of litigation from employers who are subject to these fines.
“There is a slew of litigation already against advisors that sold these plans,” said Lance Wallach, an expert on 412(i) and 419 plans. “I get calls from lawyers every week asking me to be an expert witness on these cases.”
Mr. Wallach declined to cite any specific suits. But one advisor who has been selling 412(i) plans for years said his firm is already facing six lawsuits over the sale of such plans and has another two pending. “My legal and accounting bills last year were $864,000,” said the advisor, who asked not to be identified. “And if this doesn't get fixed, everyone and their uncle will sue us.”
Currently, the IRS has instituted a moratorium on collecting these fines until the end of the year in the hope that Congress will address the issue.
In a Sept. 24 letter to Sens. Max Baucus, D-Mont., Charles Boustany Jr., R-La., and Charles Grassley, R-Iowa, IRS Commissioner Douglas H. Shulman wrote: “I understand that Congress is still considering this issue and that a bipartisan, bicameral bill may be in the works … To give Congress time to address the issue, I am writing to extend the suspension of collection enforcement action through Dec. 31.”
But with so much of Congress' attention on health care reform at the moment, experts are worried that the issue may go unresolved indefinitely.
If Congress doesn't amend the statute, and clients find themselves having to pay these fines, they will absolutely go after the advisors that sold these plans to them.
Amazon.com: IRS Secrets You Should Know eBook: Lance Wallach: Books
Lance Wallach
National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters.
He is also a featured writer and has been interviewed on television and financial talk shows including NBC, National Pubic Radio's All Things Considered and others,Lance authored 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 Trap.
National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters.
He is also a featured writer and has been interviewed on television and financial talk shows including NBC, National Pubic Radio's All Things Considered and others,Lance authored 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 Trap.
Testimonials...
"Mr. Wallach, thanks so much for taking the
time to talk to me ..today about VEBAs.
Any information you can send me would be
helpful. Hopefully, we can work together in
the future as interest in VEBAs increase."
time to talk to me ..today about VEBAs.
Any information you can send me would be
helpful. Hopefully, we can work together in
the future as interest in VEBAs increase."
Corman G. Franklin
Office of the Assistant Secretary for Policy
U.S. Department of Labor
Office of the Assistant Secretary for Policy
U.S. Department of Labor
Protect your clients – and yourself – from all kinds of financial chicanery and stupidity with this vital new book
It doesn't matter if a financial error was made because of malice or ignorance – the end result is that you lose money. Luckily, you don't have to sit idly and take it. If you have Protecting Clients from Fraud, Incompetence and Scams, you can identify and avoid the dysfunctional sectors of the financial industry, steer clear of the fallout from the Madoff Era, and guide your clients to real, healthy, sustainable returns. This powerful book
- Pinpoints dysfunctional sectors within the financial industry and offers advice against frauds and scammers
- Shows how a team approach to asset management can ward off financial predators
- Offers practical strategies and tools to combat client risk for Risk and Asset Management
Offering insightful information to protect your clients from all sorts of frauds and incompetence, this essential guide equips you with tips and techniques to spot the red flags of fraud and prevent it before it starts.
IRS Secrets You Should Know
Including
Tax, Insurance, and Cost Reduction Strategies for Small Business
Just one of these ideas from the book will save you thousands:
IRS red flags and how to audit proof your tax return
Why your retirement plan is an audit target: how to upgrade it
The only way to deduct estate and business succession plan costs
Turn your life insurance into a tax deduction
Reduce health insurance, workers’ comp and other insurance costs
Discover the only deductible benefit plan where money comes out tax free, even before retirement
Protect assets from creditors while obtaining a tax deduction
Why the IRS has turned your accountant into a tax collector, and what to do about this
Seven best new tax reduction ideas
Use a captive insurance company to reduce taxes and costs
And much more!!!
Books can be purchased here
Amazon.com: Lance Wallach: Books, Biography, Blog, Audiobooks, Kindle
The Irrevocable Trust Cash Release Program - HG.org
The Irrevocable Trust Cash Release Program
Through a special program, created by Money Watch Consultants Inc., called The Irrevocable Trust Cash Release Program, funds from the insured’s irrevocable trust can be released and made available to pay for long term care, in a facility or at home. And this care can even be provided by a family member.
The amounts of funds that can be made available are typically a vast multiple of the funds currently in the trust. Despite the leveraging, due to the unique structuring of the program, the funds in excess of the initial deposits, and prior to the death of the insured, are received by the trust, and paid out of the trust, on a tax free basis.
This program has recently attracted much attention because Congress has just extended estate tax exemptions to 5 million dollars for individuals and 10 million dollars for married couples. Thus many people who have set up and funded various irrevocable trusts in order to pay their estate taxes, feel that they are no longer needed.
This program gives them the ability to dramatically leverage these funds to pay for health care that they anticipate may eventually be required, without worrying about liquidating assets or making withdrawals on retirement accounts.
The latest development in irrevocable trust management can solve the insured’s desire to get, tax free cash out of the underused insurance policy when most needed, and prior to dying.
Through a special legal loophole, needed funds from the insured’s irrevocable trust can be released and made available to whoever you want, including yourself. Lance Wallach, who wrote the CPA's guide to trusts and estates, and other continuing education books read by CPA's attorneys and financial planners and associate William Kaufman have spent years studying the problem... Most life insurance trusts are underperforming, often requiring [Bill Kaufman] much greater premiums than anticipated. If they were properly designed, no more premiums would be due. Many policies in trusts are rapidly using up their insurance cash values, dramatically underperforming, and are at risk of failing altogether. There are many other problems with almost all of the trusts examined. If you advised your client on these matters, or serve as trustee for him/her, you may have a contingent liability suit on these matters, should the life insurance fail.
Now cash can be released to be used when really needed. Most attorneys, CPA’S, planners etc. that have heard me speak at thousands of national conventions don’t have a clue about the problems. Most of them even created some of these problems for their clients, who are also not aware. As an expert witness Lance Wallach has never lost a case. This does not necessate a lawsuit, just a simple fix. Make sure if you advisor tries it, he has successfully helped others with the program. If done wrong the IRS will come calling, Google Lance Wallach for articles on point. Despite the leveraging, due to the unique structuring of the program, the funds in excess of the initial deposits, and prior to the death of the insured, are received by the trust, and paid out of the trust, on a tax free basis.
If you have an insurance or similar trust you probably have lots of money in it. You may also have lots of problems that will not be discovered until you die. We have been consulted by many beneficiaries with these problems, usually after being charged thousands of dollars by their law firms to tell them about the problems, but not fix them. The way most of the trusts that we have studied, usually set up by law firms, are structured; the big beneficiaries at death will be the law firms. Worse, insurance in the trusts easily falls apart before death, unless you die young. Get an experienced person to review your trust, either to free up lots of money, or to review for problems before it is too late. [Bill Kaufman] If you don‘t [Bill Kaufman] believe me, than Google Lance Wallach and then Google your advisor and see who is more credible. You have worked hard for your money. Don‘t let poor planning, lawyers greed, insurance agents with big commissions disrupt what you thought was sound planning.
ABOUT THE AUTHOR: Lance Wallach, Bill Kaufman
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press. He does expert witness testimony and has never lost a case.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
This program has recently attracted much attention because Congress has just extended estate tax exemptions to 5 million dollars for individuals and 10 million dollars for married couples. Thus many people who have set up and funded various irrevocable trusts in order to pay their estate taxes, feel that they are no longer needed.
This program gives them the ability to dramatically leverage these funds to pay for health care that they anticipate may eventually be required, without worrying about liquidating assets or making withdrawals on retirement accounts.
The latest development in irrevocable trust management can solve the insured’s desire to get, tax free cash out of the underused insurance policy when most needed, and prior to dying.
Through a special legal loophole, needed funds from the insured’s irrevocable trust can be released and made available to whoever you want, including yourself. Lance Wallach, who wrote the CPA's guide to trusts and estates, and other continuing education books read by CPA's attorneys and financial planners and associate William Kaufman have spent years studying the problem... Most life insurance trusts are underperforming, often requiring [Bill Kaufman] much greater premiums than anticipated. If they were properly designed, no more premiums would be due. Many policies in trusts are rapidly using up their insurance cash values, dramatically underperforming, and are at risk of failing altogether. There are many other problems with almost all of the trusts examined. If you advised your client on these matters, or serve as trustee for him/her, you may have a contingent liability suit on these matters, should the life insurance fail.
Now cash can be released to be used when really needed. Most attorneys, CPA’S, planners etc. that have heard me speak at thousands of national conventions don’t have a clue about the problems. Most of them even created some of these problems for their clients, who are also not aware. As an expert witness Lance Wallach has never lost a case. This does not necessate a lawsuit, just a simple fix. Make sure if you advisor tries it, he has successfully helped others with the program. If done wrong the IRS will come calling, Google Lance Wallach for articles on point. Despite the leveraging, due to the unique structuring of the program, the funds in excess of the initial deposits, and prior to the death of the insured, are received by the trust, and paid out of the trust, on a tax free basis.
If you have an insurance or similar trust you probably have lots of money in it. You may also have lots of problems that will not be discovered until you die. We have been consulted by many beneficiaries with these problems, usually after being charged thousands of dollars by their law firms to tell them about the problems, but not fix them. The way most of the trusts that we have studied, usually set up by law firms, are structured; the big beneficiaries at death will be the law firms. Worse, insurance in the trusts easily falls apart before death, unless you die young. Get an experienced person to review your trust, either to free up lots of money, or to review for problems before it is too late. [Bill Kaufman] If you don‘t [Bill Kaufman] believe me, than Google Lance Wallach and then Google your advisor and see who is more credible. You have worked hard for your money. Don‘t let poor planning, lawyers greed, insurance agents with big commissions disrupt what you thought was sound planning.
ABOUT THE AUTHOR: Lance Wallach, Bill Kaufman
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press. He does expert witness testimony and has never lost a case.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
FBAR Offshore Bank Accounts and Foreign Income Attacked by IRS
You may want to think about participation in the IRS' offshore tax amnestyprogram (called the Offshore Voluntary Disclosure Initiative). Do you want to play audit roulette with the IRS? Some clients think they are too small to be prosecuted. They are wrong.
To the average businessperson, only the guys with tens of millions secretly stashed in Swiss bank accounts get prosecuted. Don't tell that to Michael Schiavo. He was just prosecuted for hiding money in a Swiss account back in 2003. How much money does the IRS say he hid? A whopping $90,000. That's it.
But wait, there is more to the story. Schiavo attempted to do a quiet disclosure during the 2009 amnesty but instead of filling out the amnesty paperwork, he simply trusted that by coming forward voluntarily he could avoid criminal prosecution. He was wrong on all counts. Nothing is too small for the IRS, and nothing is too old.
Should you File, and then Opt Out?
There's been discussion of "opting out" of the program to take your chances in audit, but it's a topic fraught with danger. Now, however, there is guidance about opting out of the program that makes much of it transparent. Because of this late date it is recommended that you properly file FBARs and the 90-day request for amnesty extension. This is the first important step. If the forms are not done properly, you will have extensive problems and will not have to think about opting out. If your forms are properly done and filed, then your situation should be discussed with someone who is experienced in these matters.
Read the whole thing here
Read the whole thing here
More Problems for 419 Plans
For years, life insurance companies and agents have tried to find ways of making life insurance premiums paid by business owners tax deductible. This would allow them to sell policies at a "discount."
The problem became acute a few years ago with outlandish claims about how §§419A(f)(5) and (6) of the Internal Revenue Code (IRC) exempted employers from any tax deduction limitations. Other inaccurate assertions were made as well, until the Internal Revenue Service (IRS) finally put a stop to such egregious misrepresentations in 2002 by issuing regulations and naming such plans as "potentially abusive tax shelters" (or "listed transactions") that needed to be registered and disclosed to the IRS.This appeared to put an end to the scourge of scurrilous promoters, as many such plans disappeared from the landscape.
And what happened to the providers that were peddling §§419A(f)(5) and (6) life insurance plans a few years ago? We recently found the answer: Most of them found a new life as promoters of so-called "419(e)" welfare benefit plans.
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