Showing posts with label IRS Facts. Show all posts
Showing posts with label IRS Facts. Show all posts

Group Captives Insurance Scam

Group Captives Insurance Scam - HG.org

Just a few years ago, captive insurance companies were a hot news item in the arcane world of abusive tax shelters. Sleazy promoters were signing up small businesses in droves. If you created a cell captive as a property and casualty loss management tool, it’s probably legitimate. If you “bought” an off the shelf captive from a promoter who promised tax savings, there is a good chance you own an abusive tax shelter.

After the initial wave of fraud and audits, many of the bad promoters went away. New reports suggest that captives are again making a comeback. And with the next generation of captives will come the inevitable fraudsters looking to catch a free ride on the resurgent popularity of these products.

IRS Facts and Issues

Facts

There is no such thing as a hopeless tax case. Citizens really have so many rights, if you know just a few of them you will never pay taxes, interest or IRS penalties you don't owe."

If you are presently embroiled in IRS conflict and need word of encouragement, then read the following...

FACT ONE:

Last year the IRS cancelled 4.9 million penalties, saving taxpayers $11.13 billion in penalties they didn't owe..

FACT TWO:

When properly challenged, the IRS cancels 60 cents of every dollar assessed in employment tax penalties.

FACT THREE:

There are four IRS approved programs of tax debt forgiveness.

FACT FOUR:

The IRS settles delinquent tax debt for between 10 to 20 cents on the dollar when a proper request is made for tax debt forgiveness.

FACT FIVE:

By asserting the right to a correspondence audit, the average tax audit bill was reduced by as much as 58%.

FACT SIX:

Last year, millions of citizens won installment agreements, thus avoiding wage and bank levies and property seizures.

FACT SEVEN:

IRS auditors have NO POWER to change your tax liability without YOUR approval.

IRS ISSUES 

Much has been made of recent restructuring legislation pointed at ending IRS errors and abuse. Historically, such legislation has had little impact on the agency. The reason is the IRS simply does not tell the truth about taxpayers' rights. Consequently, if you do not understand your rights in a given situation, you cannot expect the IRS to explain them. For example, when was the last time you received a kind letter from the IRS explaining that you paid too much in taxes or overlooked certain rights that might cut your bill? Such letters are rare indeed!

On the other hand, millions of citizen are confronted by the agency for alleged legal failings. Each year the IRS...
  • issues some one hundred million computer notices affecting nearly $200 billion in accounts;
  • issues over thirty-four million penalties against individuals and businesses;
  • executes over four million wage and bank levies;
  • files about four million general tax liens;
  • seizes tens of thousands of businesses, autos, homes, and other property, and audits nearly 2 million business and personal income tax returns.
Nearly everybody has gone through some kind of IRS enforcement difficulty and we all know somebody who is going through it now. But few have effective solutions. Too often, professional advice from tax accountants is, "well, it's the IRS. You just have to pay." Unfortunately, precious few take the time to understand that there are solutions to every IRS problem. Indeed, there is no such thing as a hopeless tax case. There is always a way to solve the problem.

For many people, this Problem Solver provides an immediate solution to a pressing IRS problem. Simple solutions are provided to problems such as wage and bank levies, IRS computer notices and penalty assessments. In other cases, this Problem Solver serves as a guide to what you must do to ultimately solve your problem. And even if you owe taxes, penalties and interest you cannot pay, you can be forgiven of all or part of your debt.

Because the IRS resists directing you to solutions to most tax problems (especially the problem of excessive tax debt) this IRS Common Problems Solver is designed to fill that void. It describes numerous taxpayer rights and remedies and shows you the steps to take to determine which solution best suits your situation. In addition, you will be introduced to an array of affordable, effective self-help materials and services to help you end your problem.

Too often, the biggest IRS problem for millions of people is the fact that it costs more to fight the agency than it does to just pay the tax. For those who cannot pay the tax or afford professional help, they live only with the promise of life-long indebtedness to the IRS--a hopeless situation. Now there is a solution. 

Now, at last, the price of tax freedom is not out of reach for anyone. However, the IRS is always working to close the door to freedom that we have worked so hard to open and expose. The IRS is always working behind the scenes to limit your rights thereby ensuring you are always a slave to tax debt. Therefore, if you have a tax problem, now is the time to address it. It only gets worse as time goes on. As you read this Problem Solver, draw encouragement from the testimonials found throughout the text and act now to solve your problem once and for all.


You may have read about how the IRS gives problems to political organizations. That is nothing compared to the honest hard working people that the IRS will, or has already harmed. To read more, click the link below.

Or contact Lance Wallach for more information at a convenient time for you at 5169385007 or at vebaplan@gmail.com

Can You Recover Money from 419 and 412i Plans? - HG.org

Can You Recover Money from 419 and 412i Plans? - HG.org



Welfare Benefit Plan Fraud: What Remedies Are Available? If you’ve been the victim of a 419 Welfare Benefit Plan scheme and now find yourself owing the Internal Revenue Service (IRS) taxes on something you were told was going to be tax deductible, it’s important to know what remedies might be available to you.


Remedies for abusive tax shelter schemes

Lance Wallach says that there are remedies for those who have been injured by an insurance company’s abusive tax shelter schemes. He predicts that we’ll see a huge spike in the number of people getting audited by the IRS.

Tax Resolution Sevices - Attorneys-USA.org Lance Wallach

Tax Resolution Sevices - Attorneys-USA.org Lance Wallach

How to Beat the IRS

How to Beat the IRS

IRS Tax Help

IRS Tax Help

How to Beat the IRS: Call for Tax Resolution, IRS Audit Defense, Expert Witness Lance Wallach

How to Beat the IRS: Call for Tax Resolution, IRS Audit Defense, Expert Witness Lance Wallach

Beware: The IRS is cracking down on small-business owners

Beware: The IRS is cracking down on small-business owners who participate in tax-reduction insurance plans sold by insurance agents, including defined benefit retirement plans, IRAs, and even 401(k) plans with life insurance. In these cases, the business owner is motivated by a large tax deduction; the insurance agent is motivated by a substantial commission.

A few years ago, I testified as an expert witness in a case in which a physician was in an abusive 401(k) plan with life insurance. It had a so-called "springing cash value policy" in it. The IRS calls plans with these types of policies "listed transactions." The judge called the insurance agent "a crook."

If your client was currently is in a 412(i), 419, captive insurance, or Section 79 plan, they may be in big trouble. Accountants who signed a tax return for a client in one of these plans may be what the IRS calls a "material advisor" and subject to a maximum $200,000 fine.

If you are an insurance professional who sold or advised on one of these plans, the same holds true for you.

Call us and see what we can do for you - 516938-5007

IRS: Disclose Offshore Accounts or Go to Jail

IRS: Disclose Offshore Accounts or Go to Jail

Brian

That's pretty much the headline from a CNBC article on Friday. And it's true.

In 2009, 15,000 Americans came forward and admitted having foreign bank accounts. Unfortunately, Uncle Sam estimates there are some 500,000 more people hiding money offshore. Opening a bank account in another country isn't illegal. There are a whole host of reasons why people may wish to send money offshore. It only becomes illegal when you send money to a foreign country in the hopes of cheating Uncle Sam.

U.S. law makes it a felony if you fail to declare the income from foreign investments on your U.S. tax return and makes it illegal to not disclose the existence of the foreign account.

So what is a person to do? Taxpayers can do nothing and hope they don't lose the "audit lottery" (there are no winners with the IRS). Or taxpayers can come into compliance, report the account and pay the government ¼ of the highest dollar amount that was in the account. That's right, if you had an account with $200,000 in it, get out the checkbook and write a check to the IRS for $50,000.

Taxpayers wanting to take advantage of the current amnesty program (called the Offshore Voluntary Disclosure Initiative) must move quickly, however. Unlike the 2009 program, which simply said you had to apply be the deadline, the current amnesty requires that all missing forms ("FBAR's"), amended returns and payment must be made by the deadline. There is a great deal of paperwork involved with the new program, waiting until the last minute is a recipe for disaster.

Those that don't comply face prison and loss of 50% of their highest account value.

So what is the risk of getting caught? We think it is quite high.

Transparency within the international banking community is at an all time high. And the developed countries are exchanging information. That means if Germany obtains information about accounts in a Bermuda bank it will likely share that information with other countries.

The U.S. has been issuing "John Doe" subpoenas to foreign banks fishing for the names of American account holders. Countries like Germany have been bribing foreign bank officials to simply steal the information and turn it over.

Still not convinced? The IRS paid its first award under the new whistleblower program - $4.5 million to an accountant who reported his employer! If anyone, anywhere knows you have a foreign account; they may report you and keep a large percentage of what you pay.

The world suddenly got much smaller.



This is interesting article but I do not believe everything in it is correct. I have received numerous phone calls from participants in these plans and the IRS is auditing.  For the most accurate information contact: Lance Wallach at lancewallach.com or call 516-935-7346

IRS Criminal Investigation Department Audits Section 79, Captive Insurance, 412i and 419 Scams

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.

Read the rest here

IRS Attacks Business Owners, Accountants, Lawsuits over 412(i)/419 and Similar Insurance Based Plans

A 412(i) plan is a “defined benefit plan” – a retirement plan, a pension plan that claims to offer very large tax deductions. It is funded with annuity and life insurance products.

Late 1990's/early 2000's, agents sold life insurance, and annuity policies to fund such plans. 

Type of policy typically had high surrender charges, depressed cash value in early years - premiums paid by employer

After premiums funded for a few years, employee purchases policy for the current depressed cash surrender value

After policy purchased, surrender charges dramatically reduced, cash value “springs” to a high level 

Employee could then borrow from high value policy for tax-free cash flow. They were called springing cash value policies.

Not all policies were of that type.

In 1995 IRS issued IRS notice 9534 warning that they would come after 419 plans. In 2004/2005, IRS began investigating and issued regulations deeming such plans as abusive tax shelters - began nationwide audits of such plans. 

Plaintiffs in these matters are typically professional groups (doctors, dentists, small business owners) audited by the IRS - plans deemed abusive tax shelters – subject to substantial fees and penalties. Participants must file under IRS 6707A to avoid additional large fines. Material advisors, people that sold the plans and accountants that gave tax advice and got paid also get fined a minimum of $100,000 if they do not properly file and tell on their client.

Professionals then file suit against insurance companies and agents claiming they were misled in the sale of these plans and policies. 

Allegations typically: 

defendants represented that policies used to fund plans would be valid and subject to favorable future tax consequences

To Date - Mixed Results for Carriers:

1. Breach of contract 

Claim dismissed - contract never promised to satisfy § 412 requirements, specifically stated that it did not guarantee any future tax consequences. Zarrella v. Pacific Life, 755 F. Supp. 2d 1231 (S.D. FL March 29, 2011) (Florida law) 

Claim allowed to proceed - allegations pled existence of written and oral contracts promising tax benefits. Chau v. Aviva Life, 2011 U.S. Dist. LEXIS 54828 (N.D. Tex May 20, 2011) (applying Washington law).

2. Negligence 

Claim dismissed because carrier is under no duty to advise its insured’s regarding tax consequences of transactions. Zarrella v. Pacific Life, (S.D. FL March 29, 2011).

3. Fraud/Misrepresentation 

A. Future statements: 

alleged misrepresentations made before the IRS pronouncements calling into question tax benefits of the various plans generally dismissed on grounds: 

(i) statements were not false when made, or 

(ii) statements were mere opinions or predictions that are not actionable. 

Berry v. Indianapolis Life, 608 F. Supp. 2d 785 (N.D. Tex. 2009, August 26, 2010) 

Zarrella v. Pacific Life, 755 F. Supp. 2d 1231 (S.D. FL March 29, 2011) 

Chau v. Aviva Life, 2011 U.S. Dist. LEXIS 54828 (N.D. Tex May 20, 2011) 

Courts generally determine that statements made by agents prior to 2004/2005 are “forward-looking” statements or “opinions” and that “as a matter of law, any representation or prediction by any alleged agent as to how the IRS would treat the 412(i) plans and finding thereof in the future is either an unactionable opinion or was unjustifiably relied upon.” Berry v. Indianapolis Life 

To Date - Mixed Results for Carriers:

B. “Disclaimer of Reliance” defense – results mixed 

Typically, in the plan documents, participant agrees he is not relying on carrier’s representations regarding the validity of the plan or its tax benefits - instead relying on own independent tax advisor

Cal. law – signed disclosure statements by plaintiffs preclude reasonable reliance on representations as a matter of law - claim dismissed. 

Berry v. Indianapolis Life 

Omni Home v. Hartford Life, 2008 Dist. LEXIS 35259 (S.D. Cal. April 29, 2008). 

Texas and Wisconsin law – disclosure documents do not preclude reliance as a matter of law. Berry v. Indianapolis Life

To date, success in dismissing claims depends upon the different courts, and applicable governing law.

Note: If alleged misrepresentations made after applicable IRS pronouncement, then representations are not predictions or opinions, but rather statements regarding the existing state of the law – probably allowed to proceed.
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