Captive Insurance Plans For Your Problems
Captive Insurance Plans
Avoid Paying nondeductible fines or penalties
Find out how we can guide you through these times
Avoid Paying nondeductible fines or penalties
Find out how we can guide you through these times
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
How to Get Fined $100,000 by the IRS
California Enrolled Agent 2009
How to Get Fined $100,000 by the IRS and Lose Your License
By Lance Wallach, CLU, ChFC and Ira Kaplan, Esq., CPA, MBA
If you don’t read anything else this year, take a quick look at this. Insurance professionals and accountants have been fined $200,000 by the IRS for being material advisors. Buisness owners have been fined over $1,000,000 for beng in retirement plans, so called 412i, 419, section 79 or captive insurance plans. Don’t think this will happen to you? It has already to happened to thousands of people just like you.
Over the past decade, business owners have been overwhelmed by a plethora of arrangements designed to reduce the cost of providing employee benefits and taxes, while simultaneously increasing their own retirement savings. The solutions ranged from traditional pension and profit sharing plans to more advanced strategies.
Some strategies, such as IRS Section 419 and 412(i) plans, used life insurance as vehicles to bring about benefits. Unfortunately, the high life insurance commissions (often 90% of the contribution, or more) fostered an environment that led to the marketing and selling of aggressive and noncompliant plans.
The result has been thousands of audits and an IRS task force seeking out tax shelter promotion. In addition, the IRS has been auditing most 412(i) defined benefit retirement plans and all 419 welfare benefit plans. These plans are sold by many insurance agents. For unknowing clients, the tax consequences are enormous. For their accountant advisors, the liability may be equally extreme. If an accountant signs a tax return with one of these plans on it, and if the IRS considers the plan an abusive, listed transaction or substantially similar to such a transaction, the accountant may be called a “material advisor”. The fine for a material advisor is $200,000 if the accountant is incorporated or $100,000 if the accountant is not incorporated. There is also an IRS referral to the Office of Professional Responsibility. We have received hundreds of phone calls recently from accountants, who are in this predicament. It is very difficult to help them after the fact. When I speak at national accounting conventions or AICPA events about these topics, most accountants in the audience do not understand what I am talking about, because they have never had this problem and are not aware of the recent IRS enforcement activities.
Unfortunately, within a few weeks after I speak at a convention, attendees will call me after reviewing their clients’ tax returns. They often find one of these abusive plans on the return (these plans are very popular). If the plan is discovered before the IRS audit, many steps can be taken. If the IRS discovers the plan on audit, the results can be disastrous, both for your client and for you. The client gets fined $200,000 per year. For more information on this, see www.vebaplan.com www.taxlibrary.us and www.irs.gov.
Recently, there has been an explosion in the marketing of a financial product called captive insurance. These so called “Captives” are typically small insurance companies designed to insure the risks of an individual business under IRS Code Section 831(b). When properly designed, a business can make tax deductible premium payments to a related party insurance company. Depending on circumstances, underwriting profits, if any, can be paid out to the owners as dividends, and profits from liquidation of the company may be taxed as capital gains.
While captives can be a great cost saving tool, they also are expensive to build and manage. Also, captives are allowed to garner tax benefits because they operate as real insurance companies. Advisors and business owners who misuse captives or market them as estate planning tools, asset protection vehicles, tax deferral or to obtain other benefits not related to the true business purpose of an insurance company face grave regulatory and tax consequences.
A recent concern is the integration of small captives with life insurance policies. Small captives, under Section 831(b), have no statutory authority to deduct life premiums. Also, if a small captive uses life insurance as an investment, the cash value of the life policy can be taxable at corporate rates, and then will be taxable again when distributed. The consequence of this double taxation is to devastate the effectiveness of the life insurance, and it extends serious liability to any accountant who recommends the plan or even signs the tax return of the business that pays premiums to the captive.
The IRS is aware that several large insurance companies are promoting their life insurance policies as investments with small captives. The outcome looks eerily like that of the 419 and 412(i) plans mentioned above.
Remember, if something looks too good to be true, it usually is. There are safe and conservative ways to use captive insurance structures to lower costs and obtain benefits for businesses. And, some types of captive insurance products do have statutory protection for deducting life insurance premiums (although not 831(b) captives). Learning what works and is safe is the first step an accountant should take in helping his or her clients use these powerful, but highly technical insurance tools.
---------------------------------
Lance's New Book!
Protecting Clients from Fraud, Incompetence and Scams
by Lance Wallach
Available at Barnes and Noble:
LINK: http://search.barnesandnoble.com/booksearch/results.asp?WRD=Lance+Wallach&box=Lance%20Wallach&pos=-1
Synopsis: 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.
---------------------------------------------------
Lance Wallach, CLU, ChFC, 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. For more information and additional articles on these subjects, visit www.vebaplan.com, www.taxlibrary.us, lawyer4audits.com or call 516-938-5007.
---------------------------------------------------
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.
Labels: 412(i), 419, 6707A, American Jobs Creation Act, Bankruptcy, C corporation, irrespective, IRS, Lance Wallach, nondisclosure, Wallach
How to Get Fined $100,000 by the IRS and Lose Your License
By Lance Wallach, CLU, ChFC and Ira Kaplan, Esq., CPA, MBA
If you don’t read anything else this year, take a quick look at this. Insurance professionals and accountants have been fined $200,000 by the IRS for being material advisors. Buisness owners have been fined over $1,000,000 for beng in retirement plans, so called 412i, 419, section 79 or captive insurance plans. Don’t think this will happen to you? It has already to happened to thousands of people just like you.
Over the past decade, business owners have been overwhelmed by a plethora of arrangements designed to reduce the cost of providing employee benefits and taxes, while simultaneously increasing their own retirement savings. The solutions ranged from traditional pension and profit sharing plans to more advanced strategies.
Some strategies, such as IRS Section 419 and 412(i) plans, used life insurance as vehicles to bring about benefits. Unfortunately, the high life insurance commissions (often 90% of the contribution, or more) fostered an environment that led to the marketing and selling of aggressive and noncompliant plans.
The result has been thousands of audits and an IRS task force seeking out tax shelter promotion. In addition, the IRS has been auditing most 412(i) defined benefit retirement plans and all 419 welfare benefit plans. These plans are sold by many insurance agents. For unknowing clients, the tax consequences are enormous. For their accountant advisors, the liability may be equally extreme. If an accountant signs a tax return with one of these plans on it, and if the IRS considers the plan an abusive, listed transaction or substantially similar to such a transaction, the accountant may be called a “material advisor”. The fine for a material advisor is $200,000 if the accountant is incorporated or $100,000 if the accountant is not incorporated. There is also an IRS referral to the Office of Professional Responsibility. We have received hundreds of phone calls recently from accountants, who are in this predicament. It is very difficult to help them after the fact. When I speak at national accounting conventions or AICPA events about these topics, most accountants in the audience do not understand what I am talking about, because they have never had this problem and are not aware of the recent IRS enforcement activities.
Unfortunately, within a few weeks after I speak at a convention, attendees will call me after reviewing their clients’ tax returns. They often find one of these abusive plans on the return (these plans are very popular). If the plan is discovered before the IRS audit, many steps can be taken. If the IRS discovers the plan on audit, the results can be disastrous, both for your client and for you. The client gets fined $200,000 per year. For more information on this, see www.vebaplan.com www.taxlibrary.us and www.irs.gov.
Recently, there has been an explosion in the marketing of a financial product called captive insurance. These so called “Captives” are typically small insurance companies designed to insure the risks of an individual business under IRS Code Section 831(b). When properly designed, a business can make tax deductible premium payments to a related party insurance company. Depending on circumstances, underwriting profits, if any, can be paid out to the owners as dividends, and profits from liquidation of the company may be taxed as capital gains.
While captives can be a great cost saving tool, they also are expensive to build and manage. Also, captives are allowed to garner tax benefits because they operate as real insurance companies. Advisors and business owners who misuse captives or market them as estate planning tools, asset protection vehicles, tax deferral or to obtain other benefits not related to the true business purpose of an insurance company face grave regulatory and tax consequences.
A recent concern is the integration of small captives with life insurance policies. Small captives, under Section 831(b), have no statutory authority to deduct life premiums. Also, if a small captive uses life insurance as an investment, the cash value of the life policy can be taxable at corporate rates, and then will be taxable again when distributed. The consequence of this double taxation is to devastate the effectiveness of the life insurance, and it extends serious liability to any accountant who recommends the plan or even signs the tax return of the business that pays premiums to the captive.
The IRS is aware that several large insurance companies are promoting their life insurance policies as investments with small captives. The outcome looks eerily like that of the 419 and 412(i) plans mentioned above.
Remember, if something looks too good to be true, it usually is. There are safe and conservative ways to use captive insurance structures to lower costs and obtain benefits for businesses. And, some types of captive insurance products do have statutory protection for deducting life insurance premiums (although not 831(b) captives). Learning what works and is safe is the first step an accountant should take in helping his or her clients use these powerful, but highly technical insurance tools.
---------------------------------
Lance's New Book!
Protecting Clients from Fraud, Incompetence and Scams
by Lance Wallach
Available at Barnes and Noble:
LINK: http://search.barnesandnoble.com/booksearch/results.asp?WRD=Lance+Wallach&box=Lance%20Wallach&pos=-1
Synopsis: 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.
---------------------------------------------------
Lance Wallach, CLU, ChFC, 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. For more information and additional articles on these subjects, visit www.vebaplan.com, www.taxlibrary.us, lawyer4audits.com or call 516-938-5007.
---------------------------------------------------
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.
Labels: 412(i), 419, 6707A, American Jobs Creation Act, Bankruptcy, C corporation, irrespective, IRS, Lance Wallach, nondisclosure, Wallach
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