Have You Dealt With Any Of These People?

Kenny Hartstein         Dennis Cunning          Steve Toth
Larry Bell                   Scott Ridge                 Randall Smith
Greg Roper                Tracy Sunderlage       Joseph Donnelly
Norm Bevan                Michael Sonnenberg  Judy Carsrud
Dan Carpenter            Michael Carroll           Anthony Fakouri
Steve Burgess            Tom Crosswhite




Than You Should Know:

The dangers of being "listed"A warning for 419, 412i, Sec.79 and captive insuranceAs published in:AccountingToday: October 25, 2010By: Lance WallachTaxpayers 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 you do not necessarily have to make a contribution or claim a tax 
deduction 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 to a 
listed transaction.

But you are also in trouble if you file incorrectly.

I have received numerous phone calls from business owners who filed and still got fined. Not only do you have to file Form 8886, 
but it has to be prepared correctly. I only know of two people in the United States who have filed these forms properly for clients. 
They tell me that was after hundreds of hours of research and over fifty phones calls to various IRS
personnel.

The filing instructions for
 Form 8886 presume a timely filing.  Most people file late and follow the directions for currently 
preparing the forms. Then the IRS fines the business owner. The tax court does not have jurisdiction to abate or lower such 
penalties imposed by the IRS. Many business owners adopted 
412i, 419, captive insurance and Section 79 plans based 
upon representations provided by insurance professionals that the plans were legitimate plans and were not informed that they 
were engaging in a listed transaction.  Upon audit, these taxpayers were shocked when the IRS asserted penalties under Section 
6707A of the Code in the hundreds of thousands of dollars. Numerous complaints from these taxpayers caused Congress to 
impose a moratorium on assessment of 
Section 6707A penalties.

The moratorium on IRS fines expired on June 1, 2010. The IRS immediately started sending out notices proposing the imposition 
of Section 6707A penalties along with requests for lengthy extensions of the Statute of Limitations for the purpose of assessing 
tax.  Many of these taxpayers stopped taking deductions for contributions to these plans years ago, and are confused and upset 
by the IRS's inquiry, especially when the taxpayer had previously reached a monetary settlement with the IRS regarding its 
deductions.  Logic and common sense dictate that a penalty should not apply if the taxpayer no longer benefits from the 
arrangement.

Treas. Reg. Sec. 1.6011-4(c)(3)(i) provides that a taxpayer has participated in a listed transaction if the taxpayer's tax return 
reflects tax consequences or a tax strategy described in the published guidance identifying the transaction as a listed transaction 
or a transaction that is the same or substantially similar to a listed transaction.  Clearly, the primary benefit in the participation of 
these plans is the large tax deduction generated by such participation.  It follows that taxpayers who no longer enjoy the benefit 
of those large deductions are no longer "participating ' in the listed transaction.   But that is not the end of the story.

Many taxpayers who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax 
deductions by continuing the deferral of income from contributions and deductions taken in prior years.  While the regulations do 
not expand on what constitutes "reflecting the tax consequences of the strategy", it could be argued that continued benefit from 
a tax deferral for a previous tax deduction is within the contemplation of a "tax consequence" of the plan strategy. Also, many 
taxpayers who no longer make contributions or claim tax deductions continue to pay administrative fees.  Sometimes, money is 
taken from the plan to pay premiums to keep life insurance policies in force.  In these ways, it could be argued that these 
taxpayers are still "contributing", and thus still must file 
Form 8886.

It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as 
described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20 which 
classifies 419(e) transactions, appears to be concerned with the employer's contribution/deduction amount rather than the 
continued deferral of the income in previous years.  This language may provide the taxpayer with a solid argument in the event 
of an audit.
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, financial and estate planning, and abusive tax shelters.  He writes 
about 412(i), 419, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty 
publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, 
National Pubic Radio's All Things Considered, and others. 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.

Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxaudit419.com or www.taxlibrary.us.

The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific 
individual or other entity.  You should contact an appropriate professional for any such advice.


10 comments:

  1. This comment has been removed by a blog administrator.

    ReplyDelete
  2. 419 412i plans IRS audits lawsuits

    Lance Wallach
    director at taxaudit419.com
    Plan names:
    Benistar, SADI Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust
    Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
    "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage"

    Names of People who SOLD:
    "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder
    Insurance Companies -- need to be 412 AND 419:
    Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
    Had tax problems Lance Wallach fixed
    From: New York City, New York - It was

    www.vebaplan.com for help

    ReplyDelete
    Replies
    1. At one time in the late 1990s OnlineAdviserTM service received more questions on the topic of 412(i) plans than any other type of retirement plan. This is a bit odd because 412(i) plans are a tiny and relatively obscure method of designing a retirement plan. The simple most likely explanation for this level of activity is that we were one of the few firms offering independent advice on the topic and small business people were able to locate us easily. In more recent years 412(i) pension plans have primarily been marketed by few insurance companies that specialize in this product.

      This article is meant to address some general questions surrounding the issues of usefulness and suitability of these retirement plans.

      The term "412(i)" comes from the section of the tax code that allows a pension plan to be run without the usual rigorous accounting and documentation. In return for this concession, the plan investments must be completely held by an insurance company. In effect, these are "hybrid" plans, with some characteristics of defined benefit plans and some characteristics of defined contribution plans. The basic intention is to enjoy the benefits of a pension-type retirement plan without the usual costs and paperwork that usually characterize traditional pension plans.

      The most common and most effective use of a 412(i) pension retirement plan is in

      Delete
  3. Listed Transactions & 419 Plans Litigation
    412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.Benistar,412i Lawsuits,419 lawsuits,412i Help,419 Help, IRS Audits,412i Problems,412i problems, Expert Witness Lance Wallach,412i Help,419 Help, Benistar Lawsuits, 412i lawsuits,419 lawsuits,

    Wednesday, August 22, 2012

    Have You Dealt With Any Of These People?

    Kenny Hartstein Dennis Cunning Steve Toth
    Larry Bell Scott Ridge Randall Smith
    Greg Roper Tracy Sunderlage Joseph Donnelly
    Norm Bevan Michael Sonnenberg Judy Carsrud
    Dan Carpenter Michael Carroll Anthony Fakouri
    Steve Burgess Tom Crosswhite



    Than You Should Know:

    The dangers of being "listed"A warning for 419, 412i, Sec.79 and captive insurance
    As published in:AccountingToday: October 25, 2010By: Lance Wallach
    Taxpayers who previously adopted 419, 412i, captive insurance or Section 79 plans are in big trouble.

    ReplyDelete
  4. Listed Transactions & 419 Plans Litigation
    412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.Benistar,412i Lawsuits,419 lawsuits,412i Help,419 Help, IRS Audits,412i Problems,412i problems, Expert Witness Lance Wallach,412i Help,419 Help, Benistar Lawsuits, 412i lawsuits,419 lawsuits,

    Wednesday, August 22, 2012

    Have You Dealt With Any Of These People?

    Kenny Hartstein Dennis Cunning Steve Toth
    Larry Bell Scott Ridge Randall Smith
    Greg Roper Tracy Sunderlage Joseph Donnelly
    Norm Bevan Michael Sonnenberg Judy Carsrud
    Dan Carpenter Michael Carroll Anthony Fakouri
    Steve Burgess Tom Crosswhite


    ReplyDelete
  5. Listed Transactions & 419 Plans LitigationRS Audits,412i Problems,412i problems, Expert Witness Lance Wallach,412i Help,419 Help, Benistar Lawsuits, 412i lawsuits,419 lawsuits,

    WMany of these taxpayers stopped taking deductions for contributions to these plans years ago, and are confused and upset
    by the IRS's inquiry, especially when the taxpayer had previously reached a monetary settlement with the IRS regarding its
    deductions. Logic and common sense dictate that a penalty should not apply if the taxpayer no longer benefits from the
    arrangement.

    Treas. Reg. Sec. 1.6011-4(c)(3)(i) provides that a taxpayer has participated in a listed transaction if the taxpayer's tax return
    reflects tax consequences or a tax strategy described in the published guidance identifying the transaction as a listed transaction
    or a transaction that is the same or substantially similar to a listed transaction. Clearly, the primary benefit in the participation of
    these plans is the large tax deduction generated by such participation. It follows that taxpayers who no longer enjoy the benefit
    of those large deductions are no longer "participating ' in the listed transaction. But that is not the end of the story.

    Many taxpayers who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax
    deductions by continuing the deferral of income from contributions and deductions taken in prior years. While the regulations do
    not expand on what constitutes "reflecting the tax consequences of the strategy", it could be argued that continued benefit from
    a tax deferral for a previous tax deduction is within the contemplation of a "tax consequence" of the plan strategy. Also, many
    taxpayers who no longer make contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is
    taken from the plan to pay premiums to keep life insurance policies in force. In these ways, it could be argued that these
    taxpayers are still "contributing", and thus still must file Form 8886.

    It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as
    described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20 which
    classifies 419(e) transactions, appears to be concerned with the employer's contribution/deduction amount rather than the
    continued deferral of the income in previous years. This language may provide the taxpayer with a solid argument in the event
    of an audit.

    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, financial and estate planning, and abusive tax shelters. He writes
    about 412(i), 419, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty
    publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC,
    National Pubic Radio's All Things Considered, and others. 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.

    Contact him at 516.938.5007, wallachinc@gmail.com or visit www.t

    ReplyDelete
    Replies
    1. Listed Transactions & 419 Plans Litigation
      412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.412i,
      Lance WallachJanuary 24, 2014 at 9:39 AM
      419 412i plans IRS audits lawsuits

      Lance Wallach
      director at taxaudit419.com
      Plan names:
      Benistar, SADI Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust
      Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
      "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage"

      Names of People who SOLD:
      "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder
      Insurance Companies -- need to be 412 AND 419:
      Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
      Had tax problems Lance Wallach fixed
      From: New York City, New York - It was

      www.vebaplan.com for help

      ReplyDelete

      Lance WallachJanuary 24, 2014 at 9:40 A
      Than You Should Know:
      lance wallach wrote to the insurance companies including hartford in 2002 this was discovered as were hartford emails they were on notive of the IRS 419 audits and lawsuits

      Delete
  6. www.vebaplan.com for help
    Two federal regulatory agencies are in hot pursuit of a shadowy hedge fund figure and various companies associated with him, claiming they pumped millions into Bernard Madoff feeder funds and other unsuccessful investments, then lied about the losses.

    On Sept. 7, both the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission filed actions in the federal Northern District of Illinois against Nikolai S. Battoo, 41, who apparently has most recently operated in Florida.

    In announcing its action, the SEC said Battoo has run numerous hedge funds and claims to manage $1.5 billion for investors worldwide, including at least $100 million in the United States.

    Battoo has gathered “tens of millions of dollars” in investments since 2009, all the while losing millions more, the SEC also said in a detailed, 32-page complaint.

    He has managed money through a series of companies including BC Capital Group, of Panama, and BC Capital Group Limited, which is believed to be run from Hong Kong. He also manages several hedge funds and is “senior advisor” for an outfit called Private International Wealth Management, and is thought to be affiliated with FuturesOne LLC, a commodities pool located in Lincoln, Neb.

    ReplyDelete
  7. GoArticles.com Logo
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    Home Submit Articles Author Guidelines Publisher Guidelines Content Feeds RSS Feeds FAQ Contact Us

    IRS to Audit Sea Nine VEBA Participating Employers by Lance Wallach
    in Finance / Taxes (submitted 2012-10-26)



    In recent months, I have received phone calls from participants in the Sea Nine VEBA and have learned that the IRS may be auditing many more participating employers in the coming months. To better assist current Sea Nine clients and those that are now or may be under audit in the future, my associates who are CPAs, tax attorneys and former IRS employees will continue to help with the Sea Nine VEBA victims and others in 419 412i captive insurance and section 79 scams and answer the following:
    • What is the IRS’s position with respect to the Sea Nine VEBA, 419 captive insurance and section 79 scams?
    • What will be the likely result of my audit?
    • What if I don't agree with my audit results?
    • What are other participants doing with respect to the audits?
    • Will the IRS impose interest and penalties?
    • What is a “listed transaction”?
    • What is Form 8886, and what are the penalties for failing to file Form 8886?
    • Will I be responsible even if I relied on my tax advisor?
    • What recourse do I have against those that promoted and sold the Sea Nine VEBA?
    The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.
    ABOUT THE AUTHOR: Lance Wallach
    Lance Wallach, CLU, ChFC, CIMC, speaks and writes extensively about financial planning, retirement plans, and tax reduction strategies. He is an American Institute of CPA’s course developer and instructor and has authored numerous best selling books about abusive tax shelters, IRS crackdowns and attacks and other tax matters. He speaks at more than 20 national conventions annually and writes for more than 50 national publications. He is the National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, and is a frequent speaker. Contact him at 516.938.5007, wallachinc@gmail.com or visit http://www.taxaudit419.com
    Copyright Lance Wallach, CLU, CHFC
    More information about Lance Wallach, CLU, CHFC
    Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer. For specific technical or legal advice on the information provided and related topics, please contact the author.
    About the Author
    Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker. Contact him at 516.938.5007, wallachinc@gmail.com or visit http://www.taxaudit419.com.

    ReplyDelete
  8. Two federal regulatory agencies are in hot pursuit of a shadowy hedge fund figure and various companies associated with him, claiming they pumped millions into Bernard Madoff feeder funds and other unsuccessful investments, then lied about the losses.

    On Sept. 7, both the Securities and Exchange Commission and the U.S. Commodity Futures Trading Commission filed actions in the federal Northern District of Illinois against Nikolai S. Battoo, 41, who apparently has most recently operated in Florida.

    In announcing its action, the SEC said Battoo has run numerous hedge funds and claims to manage $1.5 billion for investors worldwide, including at least $100 million in the United States.

    Battoo has gathered “tens of millions of dollars” in investments since 2009, all the while losing millions more, the SEC also said in a detailed, 32-page complaint.

    He has managed money through a series of companies including BC Capital Group, of Panama, and BC Capital Group Limited, which is believed to be run from Hong Kong. He also manages several hedge funds and is “senior advisor” for an outfit called Private International Wealth Management, and is thought to be affiliated with FuturesOne LLC, a commodities pool located in Lincoln, Neb.Have You Dealt With Any Of These People?

    Kenny Hartstein Dennis Cunning Steve Toth
    Larry Bell Scott Ridge Randall Smith
    Greg Roper Tracy Sunderlage Joseph Donnelly
    Norm Bevan Michael Sonnenberg Judy Carsrud
    Michael Carroll Anthony Fakouri
    Steve Burgess Tom Crosswhite 
    Wednesday, August 22, 2012

    Have You Dealt With Any Of These People?

    Kenny Hartstein Dennis Cunning Steve Toth
    Larry Bell Scott Ridge Randall Smith
    Greg Roper Tracy Sunderlage Joseph Donnelly
    Norm Bevan Michael Sonnenberg Judy Carsrud
    Dan Carpenter Michael Carroll Anthony Fakouri
    Steve Burgess Tom Crosswhite



    Than You Should Know:

    The dangers of being "listed"A warning for 419, 412i, Sec.79 and captive insurance
    As published in:AccountingToday: October 25, 2010By: 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."

    ReplyDelete