HAVE YOU BEEN THE VICTIM OF THE SALE OF ABUSIVE LIFE INSURANCE AND ANNUITY PRODUCTS SOLD AS PART OF A PENSION PLAN OR RETIREMENT PLAN?

Abusive Tax Shelters, Insurance and Annuity Product Fraud Lawsuit

RECOVER YOUR LOSSES FROM LIFE INSURANCE 412 (i) AND ANNUITY PRODUCTS SOLD AS PART OF A PENSION PLAN OR RETIREMENT PLAN

Insurance and Annuity Product Fraud Lawsuit

Life Insurance Companies and their Agents have been selling abusive life insurance and annuity products. Many pension plans have been promoted as legitimate retirement plans which contain various life insurance products and annuities. Unfortunately the Internal Revenue Service (“IRS”) has now attacked many of these pension and retirement plans and is conducting audits to demand payment for taxes, penalties and interest and attempting to disqualify many plans.

If you are an accountant, business owner, corporate officer, dentist, doctor, professional athlete, professional or corporation of high net worth, you were unscrupulously targeted by life insurance companies and their agents to purchase a 412i defined benefit pension plan. You were chosen to purchase a 412i plan because you have the net worth to pay for it.

Our investigation has disclosed that many life insurance companies, promoters, attorneys,

and accountants promoted and sold these plans, including but not limited to the following:

• American General Life Insurance Company
• Guardian Life Insurance Company
• Hartford Life and Annuity Insurance Company
• Indianapolis Life Insurance Company
• Pacific Life Insurance Company
• Pension Services, LLC
• Many Other Life Insurance Companies and Agents

The individuals and groups above devised a scheme to sell abusive tax shelters under the auspices of Section 412(i) of the tax code. A 412(i) is a defined benefit pension plan. It provides specific retirement benefits to participants once they reach retirement and must contain assets sufficient to pay those benefits. A 412(i) plan differs from other defined benefit pension plans in that it must be funded exclusively by the purchase of individual life insurance products. To create a 412(i) plan, there must

be a trust to hold the assets. The employer funds the plan by making cash contributions to the trust, and the Code allows the employer to take a tax deduction in the amount of the contributions, i.e. the entire amount.

The trust uses the contributed funds to purchase some combination of life insurance products (insurance or annuities) for the plan. As the plan participants retire, the trust will usually sell the policies for their present cash value and purchase annuities with the proceeds. The revenue stream from the annuities pays the specified retirement benefit to plan participants.

These defendants (with the aid and knowledge of the insurance companies) used the traditional structure and sold life insurance policies with excessively high premiums. The trust then uses the large cash contributions to pay high insurance premiums and the employer takes a deduction for the sum of those large contributions. As you might expect, these policies were designed with excessively high fees or “loads” which provided exorbitant commissions to the insurance companies and the agents who sold the products.

The policies that were sold were termed Springing Cash Value Policies. They had little or no cash value for the first 5-7 years, after which they had significant cash value. Under this scheme, after 5-7 years, and just before the cash value sprung, the participant typically purchases the policy from the trust for the policy’s surrender value. In theory, you have a tax free transaction.

The IRS does not recognize the tax benefit of such a plan and has repeatedly issued announcements indicating that such plans are contrary to federal tax laws and regulations.

Have you received a letter from the IRS either (1) informing you of an upcoming audit of your plan or (2) demanding payment for substantial tax “penalties and interest”? The “tax free” benefit pension plan you purchased might be a scam, a fraud. Please allow us to speak with you and review your documentation to help you to determine your best course of action. Your communications will be treated with the strictest attorney-client confidence.

If you were a victim of such a sale of a 412i or 419 plan, we encourage you to contact us immediately . You may also receive a free initial consultation by telephone at 516 9357346 If you desire a free initial phone consultation please leave a specific time or time period within which to contact you.

Since you have already expanded a substantial amount of money in your pension plan and believed it was a legitimate retirement plan, you are obviously shocked to now learn that major life insurance companies and their agents may have sold you improper retirement plans simply to generate enormous commissions on life insurance and annuities. www.taxaudit419 and www.vebaplan.com have more information.

We also help with abusive tax shelters like 419 welfare benefit plans. In 2002 Lance Wallach wrote to Hartford and other insurance companies telling them that IRS will be increasing 419 audits and law firms would be suing them. What did Hartford do? They sent out some emails to others including their compliance department and continued to sell 419 plans. Give us a call if you want a copy of this.

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Should You File, and Then Opt out? - HG.org

Expert help with 419a, 419e, 419, 412i, welfare benefit plans, 6707a penalties, form 8886, IRS audits, Section 79, Captive insurance, FBAR, tax masters, jk harris, wpi, us tax shield

Section 79-Code

Internal Revenue Code

Internal Revenue Code Section 79

Internal Revenue Code Section 79 Plans and Captive Insurance History

The two people that have been profitable in filing 8886 forms for business owners have had numerous conversations with IRS personnel. They get the impression that it is almost impossible for an accountant, tax attorney, or anybody else to properly prepare and file the forms. One of them, who spent 35 plus years with the IRS, has also been successful in fighting the IRS on penalties and fines assessed against enterprise owners who participate in these plans, though the IRS publicly claims that you cannot appeal the fine under 6707A.

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 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, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxadvisorexpert.com.

The info supplied herein is not intended as legal, accounting, monetary or any sort of guidance for any distinct individual or other entity. You need to contact an appropriate skilled for any such assistance.

Important FBAR and International Tax Information For 2014

By Lance Wallach

For individual tax returns (Forms 1040) due to be filed in 2014 (due this year by April 15, 2014, unless extended), the IRS has issued Form 8938, "Statement of Specified Foreign Financial Assets," requiring the disclosure of certain foreign accounts and assets.

Whether an individual is required to file this form is complicated, but basically this applies to the following assets if owned in 2013:
Financial accounts in foreign financial institutions.
Any stock or securities issued by foreign corporations or entities, any interest in a foreign partnership, trust or estate, as well as any financial instrument or contract issued by a foreign person, and foreign pension plans and deferred compensation arrangements (but not foreign social security). You are not, however, required to report foreign assets (1) if the assets are held in a U.S. brokerage account; (2) if you are required to disclose the asset on certain other tax form such as Form 3520 or Form 5471; or (3) if such assets (other than stock) are used in your trade or business.
Whether you have to file Form 8938 depends on the total value of such foreign assets at year end as well as the highest value at any point in the year. For U.S. citizens and residents filing joint tax returns, you must file Form 8938 if the year-end value of the foreign assets is $100,000 or more or, if the value at any time during the year exceeded $150,000. On joint returns, all foreign-based assets owned by the spouses are considered in determining these thresholds. For married spouses filing separately and for unmarried persons, the thresholds are $50,000 (year end) and $75,000 (high value during the year).

There are different rules regarding certain persons who live abroad. There are also rules regarding valuation of certain assets. These are spelled out in greater detail in the Form 8938 instructions.

If required, Form 8938 is to be filed with your Federal Income Tax Return (Form 1040). Currently only individuals having filing requirements must fill out the Form 8938, but it is expected that this will be extended to corporations, partnerships and trusts in the future.

The IRS may impose penalties for failure to file Form 8938 if you lack reasonable cause or willfully neglected to file. In addition, if you underpay your tax as a result of a transaction involving an undisclosed foreign financial asset, the penalty for such failure may be 40 percent of the underpayment (instead of the normal 20 percent). In addition, the statute of limitations for assessing tax may be extended if you fail to file the form.

It is important to note that Form 8938 is in addition to the annual Foreign Bank Account Form or "FBAR," which has different filing requirements. The FBAR, generally is required if you have ownership or signature authority over one or more foreign bank accounts with a value of over $10,000 on any date in the prior year. The FBAR is not part of your income tax return, but is filed separately and must be received by the Department of Treasury in Detroit by June 30 (timely mailing does not apply to that form).

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 Public 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, as well as AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxaudit419.com and www.taxlibrary.us

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

Lance Wallach

Lance Wallach, National Society of Accountants Speaker of the Year is featured at more than 20 conventions annually, including

the annual national conventions of the American Association of Attorney - Certified Public Accountants, National Society of Accountants, National Network of Estate Planning Attorneys, National Association of Tax Practitioners, National Association of Enrolled Agents, National Association of Health Underwriters, American Society of Pension Actuaries, Employee Benefits Expo, Health Insurance Underwriters, NAPFA, NAIFA, FPA, NABA, ALPFA and more. He writes for over fifty publications about tax reduction ideas, abusive welfare benefit and retirement plans, captive insurance companies, cash balance plans, life settlements, premium finance, and more. He is a course developer and instructor for the American Institute of Certified Public Accountants.

Lance is a prolific author, having written or collaborated on numerous books, including "The CPAs' Guide to Life Insurance" published by Bisk Education, "The Team Approach to Tax and Financial Planning," published by the American Institute of CPAs, and most recently "Protecting Clients from Fraud, Incompetence, and Scams" published by Wiley. He also writes books for various national business associations which are sold to their members and others. He has served as an expert witness on various issues, and to date his side has never lost a case.

He has appeared on radio and TV financial programs, most recently, on National Public Radio and NBC 25. He also consults on VEBAs for both public and private companies and governmental entities.

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