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Lance Wallach 

Life insurance Policy Lance Wallach Expert Witness

By:Lance Wallach Lance Wallach Expert Witness Expert Witness Services

The IRS Started Auditing 419 plans in the 1990s, and then continues 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.

​   Insurance agents, financial planners and even accountants sold many of these plans. The main motivations for buying into one were large tax deductions. The motivation for the sellers of the plans was the very large life insurance premiums generated. These plans,  which were vetted by the insurance companies, put lots of insurance on the books. Some of these plans continue to be sold, even after IRS disallowances and lawsuits against insurance agents, plan promoters, and insurance companies. To read more, click here. Lance Wallach benistar abuses life insurance policy 

California Broker, June 2011 Employee Retirement Plans

By:Lance Wallach

412i,419, Captive Insurance, and Section 79 Plans;Buyer Beware

The IRS has been attacking all 419 welfare benefit plans, many 412i retirement plans, captive insurance plans with life insurance in them, and Section 79 plans. IRS is aggressively auditing various plans and calling them "listed transaction, abusive tax shelters, or reportable transactions," participation in any of which must be disclosed to the service. The result has been IRS audits, disallowances, and huge fines for not properly reporting under IRC 6707A. To read more, click here.


Retirement Today                               

September 2011

By: Lance Wallach​

Did you get a letter from the IRS threatening to impose this fine? If you haven't already, you still may consider yourself lucky if you have not because this means that you have more time to straighten this situation out. Do not wait for this letter to come from the IRS before you call an expert to help you. Even if you have been audited already, you could still get the letter and/or fine. One has nothing to do with the other, and once the fine has been imposed, it is not able to be appealed.

 Many businesses that participate in a 412i retirement plan or the IRS is auditing a 419-welfare benefit plan, many of these plans were not in compliance with the law and are considered abusive tax shelters. To read more, click here.

Accounting Today: October 25, 2010

By: 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."

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 to tax deduction to participate. Section 6707A of the code imposes severe penalties($200,00 for a business and $100,00 for an individual) for failure to file Form 8886 with respect to a listed transaction. To read more, click here.