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 attys 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?
As an expert witness Lance Wallach's side has never lost a case. People need to be careful of 419 Welfare Benefit Plans, 412i plans, Section 79 plans and Captive Insurance Plans. Most of these plans are sold by insurance agents. If you are in an abusive, listed or similar transaction plan you need to file under IRS 6707a. The participant files form 8886, and the salesmen or accountant who signs the tax returns files form 8918 if they got paid over $10,000. They are called Material Advisors and face a minimum $100,000 fine. Some plans are offshore which could involve FBAR or OVDI filings. If you have money overseas you probably need to file for IRS tax amnesty. If you want to reduce the tax we suggest that you first file and then opt out. For more information Google Lance Wallach.
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.
sea nine veba help lance wallach on the net will help u sue insurance cos fight IRS
ReplyDeleteIlakumari Patel, Naren Patel and MVP Consulting Plus, Inc. v. Comerica Bank, Prudential Insurance Company, Kenneth Elliott, Sean Kath, Gaurang Parikh, Ramesh Sarva, Ramesh Sarva, CPA, PC and Sea Nine Associates, Inc.
Summary Lawsuit
Summary
Court Documents Court
Documents
Docket Text Docket
Text
Lawsuit Tracker™ Lawsuit
Tracker™
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Cases
Lawsuit Details
RFC Case Number: 3:2013cv04491
File Date: Friday, November 08, 2013
Plaintiff: Ilakumari Patel, Naren Patel and MVP Consulting Plus, Inc.
Plaintiff Counsel:
Defendant: Comerica Bank, Prudential Insurance Company, Kenneth Elliott, Sean Kath, Gaurang Parikh, Ramesh Sarva, Ramesh Sarva, CPA, PC and Sea Nine Associates, Inc.
Cause: 28:1132 E.R.I.S.A.
Court: Texas Northern District Court
412i-419 Plans
Delete419 & 412i benefit plan,abusive tax shelters, Lance Wallach Expert Witness
Friday, March 28, 2014
Captive Insurance & 419 Plans Litigation: February 2013
Captive Insurance & 419 Plans Litigation: February 2013
Lance Wallach's expertise will protect you from IRS attacks
www.lancewallach.com/Expertise.html
Lance Wallach is the nation's leading expert on 419 and 412i plans, captive insurance, section 79 plans, 6707A, 8886 forms and abusive tax shelters and more.
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Benistar, SADI Trust,Beta 419,Millennium Plan,Bisys, Creative Services Group,Sterling Benefit Plan, Compass 419,Niche 419,CRESP,Sea Nine Veba, American ...
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Deletesea nine veba kenneth elliott help with lancae wallach
ReplyDeletesea ninWhose responsibility is it to notify taxpayers of the need to file Form 8886?
DeleteAnswer. It depends. Many promoters take the initiative to inform their customers that the promotion may be considered to be a listed transaction and that they should consider filing Forms 8886, though some promoters have actually taken the opposite view and have directed customers to not file the Form 8886 to keep them off the IRS radar. These promoters face potential liability if the penalties are assessed. Because the Form 8886 is filed with the tax returns, it may be partly the responsibility of the CPA who prepares the returns to file the Form, though many CPAs may not know that the transaction is a listed transaction or how to prepare the Form. From the IRS perspective, the responsibility is clear – it is the taxpayer who bears the ultimate responsibility and will be penalized if the Form is not filed.
Question. Are some plans better than others?
Answer. Yes. Even though the IRS appears to have thrown a giant net over the entire industry, I have observed that many promoters have worked hard to develop a plan that complies with the tax law. The plans are supported by substantial legal and actuarial authority and make it clear that they are welfare plans and not deferred compensation plans. These plans are often very strong in their marketing materials as to the nature of the plan and also provide for less deductible amounts. On the other hand, some promotions have ignored new IRS Regulations (issued in 2003) and continue to sell and market plans that have been out of compliance for years. They make no attempt to bring their plans into compliance and seek to stay under the radar by directing their customers to not file Forms 8886.
Question. Do taxpayers have causes of action?
Answer. Maybe. We see two potential causes of action. First, in cases where the promoter has either created a defective product, or has turned a blind eye towards law changes, the promoter and potentially the insurance companies may have liability for the creating, marketing, endorsing and selling a defective product. Second, where planners have sold the product to customers improperly, by describing the plan as a safe, IRS approved retirement plan with unlimited deductions, they may have liability for fraudulent sales. e veba help
Lance WallachJanuary 7, 2014 at 10:29 AM
sea nine veba kenneth elliott help with lancae wallach
www.lancewallach.com for sea nine veba help with 419 audits and lawsuits
ReplyDeletetaxpayers who are contesting non-reporting penalties (6707A) for failure to file IRS Form 8886 with respect to participation in 419 plans like the Sea Nine VEBA, promoted by Ken Elliott. Some taxpayers claim that they were never told that the 419 plan was a “listed transaction” and that the filing of Form 8886 was required. The problem is that the 6707A penalty provides no relief for due diligence, reasonable cause or good faith. Therefore, when promoters fail to tell their clients that the plan is a listed transaction and filings are required, the promoter is guaranteeing that if the customer is audited, the penalties will be severe
ReplyDeleteFind an Expert Witness:
IRS to Audit Sea Nine VEBA Participating Employers
By Lance Wallach, CLU, CHFC Abusive Tax Shelter, Listed Transaction, Reportable Transaction Expert Witness
PhoneCall Lance Wallach at (516) 938-5007
The IRS may be auditing many more participating employers in the coming months.
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 attys 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?
ABOUT THE AUTHOR: Lance Wallach
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, international tax, and other subjects. He writes about FBAR,OVDI, international taxation, captive insurance plans and other topics. 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.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
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.
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Deletesea nine veba welfare benefit plan help
ReplyDeleteFederal Claims Court Finds That VEBA Can't Avoid Limitation On Exempt Function Income
ReplyDeleteNorthrop Corp. v. U.S., (Ct Fed Cl 6/28/2011) 107 AFTR 2d ¶ 2011-998
The U.S. Court of Federal Claims, following the precedent in the Federal Circuit, has held that a voluntary employees' beneficiary association (VEBA) couldn't avoid the limitation on exempt function income in Code Sec. 512(a)(3)(E)(i) by allocating investment income to the payment of member benefits.
Background. A Code Sec. 501(c)(9) VEBA providing for the payment of life, sick, accident or other benefits is exempt if no part of net earnings inures to the private benefit of any person. Under Code Sec. 512(a)(3)(E)(i), the amount of income that may be set aside to provide benefits under a VEBA and treated as exempt function income can't exceed the qualified asset account limit under Code Sec. 419A(c) for the tax year (without taking into account any reserve for post-retirement medical benefits). The Code Sec. 419A(c) account limit for any qualified asset account for any year i
References: For VEBAs, see FTC 2d/FIN ¶D-4400; United States Tax Reporter ¶5014.18; TaxDesk ¶672,001; TG ¶20777.
ain requirements:
ReplyDeleteHealth and accident plans under IRC section 105
Compensation for injuries under IRC section 104
Certain death benefits under IRC section 101
Employer contributions to accident and health plans under IRC section 106
Certain educational assistance benefits under IRC section 127
The examiner is not normally responsible for determining whether an employer is correctly reporting, for employment tax purposes, payments made to VEBAs. Cases indicating that employer problems exist should be referred to EO Classification on form 5666, TE/GE information report, if warranted.
Example: sea nine veba audits lawsuits cja and associates veba 419 etc googl oogle lance wallach
n today’s ever-changing business environment, one of the most critical challenges facing large corporations is providing affordable healthcare benefit plans to their Medicare eligible retirees. At VEBA, where our mission statement is “Preserving the Promise”, we have successfully designed, implemented, and communicated comprehensive retiree benefit plans at large U.S. corporations both in and out of bankruptcy.
ReplyDeleteProviding and maintaining retiree plans can be a burden to employers financially and administratively. Using our unique business model, we have helped many employers meet their retiree benefit challenges by providing solutions that result in benefit programs which meet both the retirees needs and employer’s goals.
We are dedicated to keeping pace with the ever evolving regulations and compliance issues that govern Medicare and Medicare Part D. The Affordable Care Act of 2010 contains provisions that could adversely affect the way employers receive the retiree drug subsidy (RDS) from CMS. VEBA, Inc. has leading edge solutions that allow employers to maintain this benefit and subsidy for your retirees.
707A Penalties & 419 Plans Litigation
ReplyDeletevebaplan.blogspot.com/
Nov 23, 2013 - 412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.
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Aug 15, 2012 - 412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.
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Aug 15, 2012 - Benistar,412i Lawsuits,419 lawsuits,412i Help,419 Help, IRS Audits,412i ... Section 79, Captive Insurance, IRS Audits and Lawsuits on 419 and ...
benistar 419 lawsuits vebaplan.com for help
n today’s ever-changing business environment, one of the most critical challenges facing large corporations is providing affordable healthcare benefit plans to their Medicare eligible retirees. At VEBA, where our mission statement is “Preserving the Promise”, we have successfully designed, implemented, and communicated comprehensive retiree benefit plans at large U.S. corporations both in and out of bankruptcy.
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DeleteVebaplan.org
ReplyDeletewww.vebaplan.org/
By Lance Wallach June The IRS started auditing 419 plans in the '90s, and then continued going after 412i and other plans that they considered abusive, listed, ...
VEBAs Anyone? | Archive content from WealthManagement.com
wealthmanagement.com › Archive
Nov 1, 1997 - VEBAs have been around since 1928 but until recently, scarcely used. ... a VEBA doesn't make it so," says Lance Wallach, a VEBA consultant ...
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Veba Health Care: IRS to Audit Sea Nine VEBA Participating ...
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Dec 1, 2013 - IRS to Audit Sea Nine VEBA Participating Employers. Lance Wallach, expert witness. The IRS may be auditing many more participating ...
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VEBA Promoter: Breaks Justify The Risks | LifeHealthPro
www.lifehealthpro.com/1999/11/.../veba-promoter-breaks-justify-the-ris...
Nov 8, 1999 - BySan Antonio, Texas Lance Wallach, a Plainview, N.Y., financial planner who has helped revive the use of Voluntary Employee Benefit ...
Veba Plans - TaxLibrary.us
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On September 9, 2008 10:30 a.m. ET , Lance Wallach, CLU, CHFC presented detailed information about VEBAs to a professional audience. Find a link to his ...
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ReplyDeleteBusiness valuation resources,the Business Valuation Update newsletter, information on private and public company acquisitions, control premiums, implied minority discounts, discounts for lack of marketability, business valuation legal cases, an economic outlook, industry profiles, and comparative financial data by SIC code
Thursday, March 13, 2014
Investment News - Lance Wallach - 412i and 419 plan litigatation
Investment News - Lance Wallach - 412i and 419 plan litigatation
ReplyDeleteLance Wallach
Managing Director
Specializing in the following services:
"IRS audit appeals"
U.S. 'Tax Court' cases
Multinational taxation consulting
Recovering losses from insurance companies
& brokerage firms
Tax shelter analysis
Pension plan reviews & evaluations
419 & 412i benefit plan analysis
419 & 412i plan remediation
Offshore tax shelter issues
IRS listed transactions" assistance
Expert witness testimony for:
IRS Taxes
Insurance & retirement plan cases
The Offices of Lance Wallach
516-938-5007 Vebaplan.org
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Serving
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TaxAudit419.com ReportableTransactions Listed Transactions IRS6707Apenalty IRSform8886 TaxAdvisorExperts
ExpertTaxAdvisors Taxlibrary.us
Our consulting attorneys, CPAs & ex IRS agents
have helped our clients
save hundreds of thousands of dollars
successfully defending them in lawsuits,
IRS audits & cutting IRS penalties.
Abusive Tax Shelters: Lance Wallach tells national radio ...
ReplyDeletekmjradiolance3.blogspot.com/.../lance-wallach-tells-national-radio.html
Apr 19, 2011 - Lance Wallach tells national radio audience how IRS can collect billions by eliminating its bureaucracy & incompetence & going after the real ...
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robin weingast 419 audit google lance wallach for more ...
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Dec 19, 2012 - Information about robin weingast 419 audit google lance wallach for more was first submitted to Scambook on Dec 19, 2012. Since then the
Section 79 Plans
ReplyDelete412i, 419e plans litigation and IRS Audit Experts for abusive insurance reportable or listed transactions by the IRS,Section 79, Section 79 Lawsuits,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,
Tuesday, May 1, 2012
Unsettled Times Call For a Little Magic.
Lance Wallach
What does the future look like for those of us in the Employee Benefit industry? Some wonder if there will even be a group health insurance market in a few years. Until the US Supreme Court makes their decision(s) regarding Patient Protection and Affordable Care Act (PPACA) later this year, that is a question which seems to hold credence with many when it really shouldn’t.
Don’t read this as a statement of affirmation of PPACA by any stretch of the imagination. I’m merely suggesting that whether PPACA is overturned or upheld…. There are viable solutions on both sides of the outcome and we should consider them.
PPACA is overturned, what then?
One might think business as usual would be the prevailing thought. I would like to think we are better than that. The United States is in the midst of an economically stressful time, our customers, and their employees need our help. The days of a low enough deductible to be considered useful by the insured does not need to be over. The days of employee benefits consuming fully 30% Plus of our customer’s bottom line needs to go…. And go quickly.
As to the “Great” plans that are out there; How many plans have what would be considered “great” benefits yet are cost prohibitive for family members to participate in due to cost?
Those types of benefits can still be delivered to your customers and their employees but not traditionally. (And why would you want to after considering the previous statement?) The best way to accomplish our customer’s wishes is to help fund their plan by taking back a portion of the insurance carrier’s profits and keeping those monies within the plan itself.
ReplyDeleteSection 79, captive insurance, 412i, 419, audits, problems and lawsuits
________________________________________
April 24, 2012 By Lance Wallach, CLU, CHFC
________________________________________
Captive insurance, section 79, 419 and 412i problems
WebCPA
The dangers of being "listed"
A warning for 419, 412i, Sec.79 and captive insurance
Accounting Today: October 25,
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 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
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robin weingast 419 audit google lance wallach for more
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As an expert witness Lance Wallach side has never lost a case: Lance Wallach
As an expert witness Lance Wallach side has never lost a case: Lance Wallach: Lance Wallach An organization to help those harmed by the IRS, don't let what happened to Bruce happen to you
Lance Wallach Wrote the Book
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Chapter 1 - Planning for Business Owners
Learning Objectives
Introduction
Building the Perfect Retirement Plan
SEP IRA: The Good
SEP IRA: The Bad
SEP IRA: The Ugly
The K
The Double K
Defined Benefit Plans
Adding Survivor Benefits
412(i) Defined Benefit Plan
Cash Balance Plans
VEBAs and 419 Plans
Taxability of Trust Net Income
Taxability of Excess Benefits
Group-Term Life Insurance Plan
Post-Retirement Medical Benefit
Voluntary Employees Beneficiary Association (VEBA) - Commentary
New Development - Welfare Benefit Plans under Section 419(e)
Executive Carve Out Long-Term Care
What Is Long-Term Care?
How Much Does It Cost
Benefits of Long-Term Care Insurance to Employees
Benefits of Long-Term Care Insurance to Employers
Executive Carve Out Long-Term Care
Taxability
Long-Term Care Insurance Premium Deductibility
2007 Eligible Long-Term Care Insuranc
KENNETH ELLIOT
ReplyDeleteTuesday, January 7, 2014
United States Of America, Oct. 9th 2013
Plantiff, Case No SACV13-1582
vs
Kenneth Elliot d/b/a Kae Insurance COMPLAINT FOR PERMANENT
Services, Inc., Vista Barranca, Inc., and INJUNCTION AND OTHER
Kae Consulting: Sea Nine Associates, Inc., RELIEF
and Ramesh Sarva
Defendants.
The United States of America, for its complaint against Defendants Kenneth Elliot d/b/a KAE Insurance Services, Inc., Vista Barranca, Inc., and KAE Consulting, Sea Nine Associates, Inc., and Ramesh Sarva, seeking a permanent injunction pursuant to 26 U.S. C. 7402 and 7408 to prohibit them from further promoting a fraudulent tax scheme.
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Labels: Kae Consulting, Kae Insurance Service, Kenneth Elliot, Ramesh Sarva, Sea Nine Associates, Sea Nine Veba
7 comments:
Lance WallachFebruary 6, 2014 at 6:19 AM
google lance wallach for help with sea nine veba gist mill benistar etc or www.vebaplan.com
Reply
Lance WallachMarch 3, 2014 at 7:05 AM
as an expert lance wallach has never lost
KENNETH ELLIOT
Tuesday, January 7, 2014
Defendant Kenneth Elliot
Defendant Kenneth Elliot personally and through both his employment with co-defendant Sea Nine Associates, Inc., a number of related entities he controls ( KAE Insurance Services, Inc., Vista Barranca, Inc., and Kae Consulting) and a network of affiliated third parties (e.g. independent certified public accountants,and financial planners) informs potential participating companies that participating in a Veba plan provides them with a lucrative and tax advantage method to accrue wealth.
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Labels: Kae Consulting, Kae Insurance Service, Kenneth Elliot, Ramesh Sarva, Sea Nine Associates, Sea Nine Veba
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ReplyDeleteReporting by U.S. Persons Holding Foreign Financia
Contact Information
Email :
LanWalla@aol.com
Phone :
516-983-5007
Address :
Lance Wallach
www.taxaudit419.com
www.vebaplan.org
IRS Form 8938
FATCA requires any U.S. person holding foreign financial assets with an aggregate value exceeding $50,000 to report certain information about those assets on a new form (Form 8938) that must be attached to the taxpayers annual tax return. Reporting applies for assets held in taxable years beginning on or after January 1, 2011. Failure to report foreign financial assets on Form 8938 will result in a penalty of $10,000 (and a penalty up to $50,000 for continued failure after IRS notification). Further, underpayments of tax attributable to non-disclosed foreign financial assets will be subject to an additional substantial understatement penalty of 40 percent.
Under FATCA, U.S. taxpayers holding financial assets outside the United States must report those assets to the IRS on a new form attached to their tax return. Penalties apply for failure to comply with this new reporting requirement. Reporting is required for assets held in taxable years beginning on or after January 1,
IN THE UNITED STATES DISTRICT COURT
ReplyDeleteFOR THE EASTERN DISTRICT OF PENNSYLVANIA
BISHNU C. BORAH, M.D., P.C., :
and BISHNU BORAH, M.D., :
Plaintiffs, : CIVIL ACTION
:
v. :
:
MONUMENTAL LIFE INSURANCE :
COMPANY, et al., : No. 04-3617
Defendants. :
MEMORANDUM AND ORDER
Schiller, J. February 14, 2005
PlaintiffsBishnuBorah,M.D.(“Borah”) andBishnuC.Borah,M.D.,P.C.(“Borah,M.D.”)
bring this action alleging RICO violations, violations of the New Jersey Racketeering Act and the
New Jersey Consumer Fraud Act, fraud, negligent misrepresentation, breach of fiduciary duty,
respondeatsuperior,andconspiracy. Presently before the Court is the motion of Defendant Sea Nine
Associates (“Sea Nine”) to dismiss. For the reasons below, this Court grants the motion.
I. BACKGROUND
The following allegations are taken from the Complaint and accepted as true for purposes
of the instant motion. Borah practices medicine through Borah, M.D. The numerous Defendants
in this action are insurance companies, insurance salespersons, financial services companies, and
financial planners who have engaged in a scheme to inducePlaintiffsto participate in a programof
life insurance known as Continuous Group (“C-Group”) life insurance. (Compl. ¶ 1.) Various
DefendantsmarketedtheC-GrouplifeinsurancethroughVoluntaryEmployeeBenefitAssociati
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Captive Insurance Plans: The Dangers of Being “Listed”
ReplyDelete19 October 2011
Guest post 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 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,
This comment has been removed by the author.
Deleterameshsarvaveba.blogspot.com/2014/.../sarva-more-you-should-know.ht...
ReplyDeleteTuesday, January 7, 2014 ... Sarva has similarly made numerous false statements to his customers about the Sea Nine VEBA plans despite his notice that they are not compliant with Section 419A(f)(6). He touts his many years of work with Sea Nine VEBA plans to potential customers reassuring them that the plans are ...
You and Lance Wallach +1'd this
RAMESH SARVA: January 2014
This comment has been removed by the author.
ReplyDeletemany taxpayers who are or were participants in the Greater Metropolitan Single Employer 419 Plan. The IRS audits are conducted by three upstate New York Offices of the IRS. The IRS Agents have a template information document request that is being used to gather information about the Plan, the Promoters and the employer’s participation in the Plan. Anyone finding themselves under audit with respect to this Plan should seek immediate representation by Tax Counsel. The IRS has not yet determined whether the Greater Metropolitan Plan is a “listed transaction” as identified in IRS Notice 2007-83. Taxpayers should seek immediate guidance as to whether they should currently file IRS Form 8886 to avoid draconian penalties under Internal Revenue Code Section 6707A.
ReplyDeleteDid You Buy a Section 79 Plan? Do You Know How To Avoid Being Fined By The IRS?
ReplyDeleteWhat is a Section 79 plan and How Do You Avoid
Fines?
So what is a Section 79 plan? It is a tax plan where small-business owners are told that they’re allowed to take a tax deduction through their
businesses in order to purchase life insurance. That sounds pretty good, doesn’t it? When you break down the math and the sales pitch,
however, it just doesn’t make sense.
Agents try to sell Section 79 plans for two simple reasons:
Many small business clients will buy any plan that is "deductible" because they hate paying income taxes.
Insurance advisors want to sell life insurance.
This brings up an interesting issue: If the plan is marginal from a wealth-building standpoint, then why are agents selling it? Again, there are two
reasons:
Most advisors have not broken down the math so they can come to a correct conclusion, which is that the plans are not worth
implementing from a pure financial standpoint.
Some advisors know the plan is marginal from a financial standpoint and don't care because they know they can still sell it to business
owners who are looking for deductions. The IRS considers them abusive, and will audit them.
How to avoid the fines
In order to avoid substantial IRS fines, business owners and material advisors involved in the sale of any of the above type plans must properly
file under Section 6707A. Yet filing often isn’t enough; many times, the IRS assesses fines on clients whose accountants did file the form yet
made a mistake – an error that usually results in the client being fined more quickly than if the form were not filed at all.
Everyone in a Section 79 should file protectively under Section 6707A – and anyone who has not filed protectively in a 419 or 412(i) had better get
some good advice from someone who knows what is going on, and has extensive experience filing protectively. The IRS still has task forces
auditing these plans, and will soon move on to Section 79 scams, including many of the illegal captives pushed by the insurance companies
and agents (though not all captives are illegal).
Did You Buy a Section 79 Plan? Do You Know How To Avoid Being Fined By The IRS?
ReplyDeleteWhat is a Section 79 plan and How Do You Avoid
Fines?
So what is a Section 79 plan? It is a tax plan where small-business owners are told that they’re allowed to take a tax deduction through their
businesses in order to purchase life insurance. That sounds pretty good, doesn’t it? When you break down the math and the sales pitch,
however, it just doesn’t make sense.
Agents try to sell Section 79 plans for two simple reasons:
Many small business clients will buy any plan that is "deductible" because they hate paying income taxes.
Insurance advisors want to sell life insurance.
This brings up an interesting issue: If the plan is marginal from a wealth-building standpoint, then why are agents selling it? Again, there are two
reasons:
Most advisors have not broken down the math so they can come to a correct conclusion, which is that the plans are not worth
implementing from a pure financial standpoint.
Some advisors know the plan is marginal from a financial standpoint and don't care because they know they can still sell it to business
owners who are looking for deductions. The IRS considers them abusive, and will audit them.
How to avoid the fines
In order to avoid substantial IRS fines, business owners and material advisors involved in the sale of any of the above type plans must properly
file under Section 6707A. Yet filing often isn’t enough; many times, the IRS assesses fines on clients whose accountants did file the form yet
made a mistake – an error that usually results in the client being fined more quickly than if the form were not filed at all.
Everyone in a Section 79 should file protectively under Section 6707A – and anyone who has not filed protectively in a 419 or 412(i) had better get
some good advice from someone who knows what is going on, and has extensive experience filing protectively. The IRS still has task forces
auditing these plans, and will soon move on to Section 79 scams, including many of the illegal captives pushed by the insurance companies
and agents (though not all captives are illegal).
Tax Roundup, 4/23/14: The Tax Fairy isn’t named “VEBA.” And: frivolous IRS notices!
ReplyDeleteApril 23rd, 2014 by Joe Kristan
tax fairyThe Tax Fairy, that fickle goddess of painless massive tax reduction, is often sought in the misty fens of the welfare benefit sections of the tax law. A U.S. District Court in California has deprived the Tax Fairy’s believers of one guide for their hunt.
CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRS complaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off
Tax Roundup, 4/23/14: The Tax Fairy isn’t named “VEBA.” And: frivolous IRS notices!
ReplyDeleteApril 23rd, 2014 by Joe Kristan
tax fairyThe Tax Fairy, that fickle goddess of painless massive tax reduction, is often sought in the misty fens of the welfare benefit sections of the tax law. A U.S. District Court in California has deprived the Tax Fairy’s believers of one guide for their hunt.
CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRS complaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off
HOME ABOUT US SEARCH COLUMNS ENVIRONMENTAL DARKROOM ALMANAC ENTERTAINMENT SECURITIES APPELLATE MASTHEAD
ReplyDeleteCourthouse News S Diat declined to comment
HOME ABOUT US SEARCH COLUMNS ENVIRONMENTAL DARKROOM ALMANAC ENTERTAINMENT SECURITIES APPELLATE MASTHEAD
ReplyDeleteCourthouse News S Diat declined to comment
HOME ABOUT US SEARCH COLUMNS ENVIRONMENTAL Department of Justice took legal action last year to enjoin program administrator/defendant Sea Nine Associates and the firm's employee, defendant Kenneth Elliot, from marketing the VEBA program. California has since suspended Sea Nine's operations, the lawsuit states.
ReplyDeleteIn time, Ulti-Mate says, owners realized that the plans were the "same or substantially similar" to tax-avoidance schemes, that their life insurance premium payments were not tax-deductible, that the claim that they could withdraw money tax-free was "false," and that the plaintiffs were "victims ensnared in this long-running scheme."
"With their high fees and low cash values, the policies have few advantages once stripped of their supposed tax advantages," the 48-page complaint states.
Further, Ulti-Mate says, defendants concealed from the plaintiffs' financial planner a 2004 letter issued by tax attorneys that found the programs were unlawful.
Without that crucial information, the business owners made $914,696.74 in contributions to the VEBA program, according to the complaint. After an IRS audit, they were forced to pay $362,904.91 in penalties, interest, and back taxes, the lawsuit states.
"AIG had worked closely with the other defendants on these programs since 2001 or 2002, supplied some of the most critical marketing materials used to market these programs, and sold many policies," the complaint states. "At all relevant times, AIG knew that plaintiffs and members of the class were induced by defendants' conduct to believe that purchasing these policies through a VEBA program provided the significant tax advantages described elsewhere in this complaint," the lawsuit states.
Named as defendants are AIG, Sea Nine, Innovative Private Strategies & Insurance Services, I.P.S. Private Advisors, Lalat Pattanaik, Laban Pattanaik, Elliot doing business as Kae, Kae Consulting, Vista Barranca, and Peter Mordin.
The plaintiffs seek punitive damages, restitution, rescission and costs.
They are represented by Tyler Meade, with Meade & Schrag, of Berkeley.
AIG spokesman Jon Diat declined to comment.
HOME ABOUT US SEARCH COLUMNS ENVIRONMENTAL Department of Justice took legal action last year to enjoin program administrator/defendant Sea Nine Associates and the firm's employee, defendant Kenneth Elliot, from marketing the VEBA program. California has since suspended Sea Nine's operations, the lawsuit states.
ReplyDeleteIn time, Ulti-Mate says, owners realized that the plans were the "same or substantially similar" to tax-avoidance schemes, that their life insurance premium payments were not tax-deductible, that the claim that they could withdraw money tax-free was "false," and that the plaintiffs were "victims ensnared in this long-running scheme."
"With their high fees and low cash values, the policies have few advantages once stripped of their supposed tax advantages," the 48-page complaint states.
Further, Ulti-Mate says, defendants concealed from the plaintiffs' financial planner a 2004 letter issued by tax attorneys that found the programs were unlawful.
Without that crucial information, the business owners made $914,696.74 in contributions to the VEBA program, according to the complaint. After an IRS audit, they were forced to pay $362,904.91 in penalties, interest, and back taxes, the lawsuit states.
"AIG had worked closely with the other defendants on these programs since 2001 or 2002, supplied some of the most critical marketing materials used to market these programs, and sold many policies," the complaint states. "At all relevant times, AIG knew that plaintiffs and members of the class were induced by defendants' conduct to believe that purchasing these policies through a VEBA program provided the significant tax advantages described elsewhere in this complaint," the lawsuit states.
Named as defendants are AIG, Sea Nine, Innovative Private Strategies & Insurance Services, I.P.S. Private Advisors, Lalat Pattanaik, Laban Pattanaik, Elliot doing business as Kae, Kae Consulting, Vista Barranca, and Peter Mordin.
The plaintiffs seek punitive damages, restitution, rescission and costs.
They are represented by Tyler Meade, with Meade & Schrag, of Berkeley.
AIG spokesman Jon Diat declined to comment.
Case 8:13-cv-01582-JLS-JPR Document 1 Filed 10/09/13 Page 2 of 43 Page ID #:2
ReplyDelete1 The United States of America, for its complaint against Defendants Kennet .
. 2 Elliott d/b/a KAE Insurance Services, Inc., Vista Barranca, Inc., and
3 Consulting, and Sea Nine Associates, Inc., and Ramesh Sarva, seeking
4 permanent injunction pursuant to 26 U.S.C. ("I.R.C.") §§ 7402 and 7408 t
5 ·prohibit them from further promoting a fraudulent tax scheme (more complete!
. 6 described herein), states as follows:
7
8 NATURE OF ACTION
,g 1. Defendants organize, operate, and/or promote a scheme in which the
10 sell to customers owning small, often closely-held companies participation i
11 Voluntary Employee Beneficiary Association ("VEBA") plans. The Defendant
12 claim that customers can, through the contributions their businesses make t
13 VEBA plans administered or operated by the Defendants, fund for their employee
14 (and more often than not themselves) a valuable insurance.:.oriented welfare benefi
15 while claiming all of the VEBA contributions as a federal income tax deduction.
16 At the same time, those plan contributions are intended to provide participatin
17 customers with a valuable deferred compensation-like benefit
Case 8:13-cv-01582-JLS-JPR Document 1 Filed 10/09/13 Page 2 of 43 Page ID #:2
ReplyDelete1 The United States of America, for its complaint against Defendants Kennet .
. 2 Elliott d/b/a KAE Insurance Services, Inc., Vista Barranca, Inc., and
3 Consulting, and Sea Nine Associates, Inc., and Ramesh Sarva, seeking
4 permanent injunction pursuant to 26 U.S.C. ("I.R.C.") §§ 7402 and 7408 t
5 ·prohibit them from further promoting a fraudulent tax scheme (more complete!
. 6 described herein), states as follows:
7
8 NATURE OF ACTION
,g 1. Defendants organize, operate, and/or promote a scheme in which the
10 sell to customers owning small, often closely-held companies participation i
11 Voluntary Employee Beneficiary Association ("VEBA") plans. The Defendant
12 claim that customers can, through the contributions their businesses make t
13 VEBA plans administered or operated by the Defendants, fund for their employee
14 (and more often than not themselves) a valuable insurance.:.oriented welfare benefi
15 while claiming all of the VEBA contributions as a federal income tax deduction.
16 At the same time, those plan contributions are intended to provide participatin
17 customers with a valuable deferred compensation-like benefit
#vebaauditslawsuitsIRS
ReplyDeleteSea Nine VEBAs under attack by IRS
ReplyDeleteWe have received numerous calls from taxpayers who are under audit with the IRS with respect to their participation in the Sea Nine VEBA, a 419A(f)(6) multiple employer welfare benefit plan. The IRS audits are generally managed in one of several upstate New York offices of the IRS. Williams Coulson and Michael Lloyd have represented more than 400 clients in IRS audits in the last three years with respect to participation in 419 plans and more than 200 of those audits were with the New York offices of the IRS.
#kenelliotseanineveba
ReplyDelete#kenelliotseanineveba
ReplyDeleteSea Nine VEBAs under attack by IRS
ReplyDeleteWe have received numerous calls from taxpayers who are under audit with the IRS with respect to their participation in the Sea Nine VEBA, a 419A(f)(6) multiple employer welfare benefit plan. The IRS audits are generally managed in one of several upstate New York offices of the IRS. Williams Coulson and Michael Lloyd have represented more than 400 clients in IRS audits in the last three years with respect to participation in 419 plans and more than 200 of those audits were with the New York offices of the IRS.
#kenelliotseanineveba
ReplyDelete
ReplyDeleteKENNETH ELLIOT: Sea Nine VEBA
Reportable Transactions 3
ReplyDelete412i and 419e plans litigation and IRS Audit Experts for abong-running scheme." "With their high fees pecialize in 419 plans,412i plans,
sea nine veba audits lawsuits
ReplyDeletePublished on Published onJune 21, 2016
Stacey Arenas
VEBA crooks beware, Lance Wallach is going to finish you off.
ReplyDeleteJohn Hancock Life Insurance Co. of New York and Nationwide Life Insurance Co. are in the crosshairs of a pair of lawsuits challenging their involvement with a disbarred attorney who mishandled millions of dollars of employer-sponsored cash value life insurance policies ( Hausknecht v. John Hancock Life Ins. Co. of N.Y. , E.D. Pa., No. 2:17-cv-03911, complaint filed 8/31/17 ; Corman v. Nationwide Life Ins. Co. , E.D. Pa., No. 2:17-cv-03912, complaint filed 8/31/17 ).
At issue in the case is the multiple-employer welfare arrangement designed and created by disbarred attorney John Koresko and his entities—commercially known as REAL VEBA. The arrangement drew multiple lawsuits by the Labor Department and participants who suffered losses due to Koresko’s mishandling of several aspects of the REAL VEBA.
John Hancock and Nationwide are accused of selling their life insurance products through the arrangement and encouraging their agents to recommend it despite allegedly knowing that its nature was misrepresented, according to two separate lawsuits filed Aug. 31 in federal court in Pennsylvania. The insurers also allowed Koresko to convert plan assets by authorizing loans in violation of ERISA, the lawsuits alleges.
Nationwide hasn’t been served with the lawsuit yet, Nationwide’s spokesman Ryan Ankrom told Bloomberg BNA Aug. 31 via email. “We’ll examine the allegations carefully and explore all our legal options,” Ankrom said.
The lawsuit against Nationwide was filed by James Corman, Energy Alternative Studies Inc., and its welfare benefit plan. Nationwide allegedly sold at least 13 policies through the REAL VEBA to at least 12 plans.
The Ohio-based insurance company changed the owners and beneficiaries of 13 policies despite knowing that Koresko lacked the authority to make those changes, the lawsuit said. In addition, Nationwide converted plan assets by allegedly making at least eight separate loans to Koresko for $2 million and concealing it from participants. The loans were secured by the cash value in policies owned by the plans.
Aric D. Hausknecht, the Complete Medical Care Services of New York PC, and its welfare benefit plan filed the lawsuit against John Hancock. They claim that John Hancock sold at least 31 policies through the arrangement to at least 21 plans. The Michigan-based insurer allegedly converted plan assets by making at least six separate loans to Koresko for $2.9 million, the lawsuit alleges.
John Hancock didn’t immediately respond to Bloomberg BNA’s request for comment.
Koresko in 2015 was ordered to pay more than $38 million for violating the Employee Retirement Income Security Act by transferring plan assets from plans that he sold to employers for his personal benefit or for the benefit of companies he owned and controlled. Last year, a law firm agreed to pay $980,000 to settle a lawsuit challenging its involvement with the Koresko scheme.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
For More Information
Text of the Nationwide lawsuit is at http://src.bna.com/r9C.
Text of the John Hancock lawsuit is at http://src.bna.com/r9A.
VEBA crooks beware, Lance Wallach is going to finish you off.
ReplyDeleteJohn Hancock Life Insurance Co. of New York and Nationwide Life Insurance Co. are in the crosshairs of a pair of lawsuits challenging their involvement with a disbarred attorney who mishandled millions of dollars of employer-sponsored cash value life insurance policies ( Hausknecht v. John Hancock Life Ins. Co. of N.Y. , E.D. Pa., No. 2:17-cv-03911, complaint filed 8/31/17 ; Corman v. Nationwide Life Ins. Co. , E.D. Pa., No. 2:17-cv-03912, complaint filed 8/31/17 ).
At issue in the case is the multiple-employer welfare arrangement designed and created by disbarred attorney John Koresko and his entities—commercially known as REAL VEBA. The arrangement drew multiple lawsuits by the Labor Department and participants who suffered losses due to Koresko’s mishandling of several aspects of the REAL VEBA.
John Hancock and Nationwide are accused of selling their life insurance products through the arrangement and encouraging their agents to recommend it despite allegedly knowing that its nature was misrepresented, according to two separate lawsuits filed Aug. 31 in federal court in Pennsylvania. The insurers also allowed Koresko to convert plan assets by authorizing loans in violation of ERISA, the lawsuits alleges.
Nationwide hasn’t been served with the lawsuit yet, Nationwide’s spokesman Ryan Ankrom told Bloomberg BNA Aug. 31 via email. “We’ll examine the allegations carefully and explore all our legal options,” Ankrom said.
The lawsuit against Nationwide was filed by James Corman, Energy Alternative Studies Inc., and its welfare benefit plan. Nationwide allegedly sold at least 13 policies through the REAL VEBA to at least 12 plans.
The Ohio-based insurance company changed the owners and beneficiaries of 13 policies despite knowing that Koresko lacked the authority to make those changes, the lawsuit said. In addition, Nationwide converted plan assets by allegedly making at least eight separate loans to Koresko for $2 million and concealing it from participants. The loans were secured by the cash value in policies owned by the plans.
Aric D. Hausknecht, the Complete Medical Care Services of New York PC, and its welfare benefit plan filed the lawsuit against John Hancock. They claim that John Hancock sold at least 31 policies through the arrangement to at least 21 plans. The Michigan-based insurer allegedly converted plan assets by making at least six separate loans to Koresko for $2.9 million, the lawsuit alleges.
John Hancock didn’t immediately respond to Bloomberg BNA’s request for comment.
Koresko in 2015 was ordered to pay more than $38 million for violating the Employee Retirement Income Security Act by transferring plan assets from plans that he sold to employers for his personal benefit or for the benefit of companies he owned and controlled. Last year, a law firm agreed to pay $980,000 to settle a lawsuit challenging its involvement with the Koresko scheme.
To contact the reporter on this story: Carmen Castro-Pagan in Washington at ccastro-pagan@bna.com
To contact the editor responsible for this story: Jo-el J. Meyer at jmeyer@bna.com
For More Information
Text of the Nationwide lawsuit is at http://src.bna.com/r9C.
Text of the John Hancock lawsuit is at http://src.bna.com/r9A.
For the third consecutive year, the IRS places abusive micro-captive insurance tax shelters on its list of “Dirty Dozen” tax scams. The list, compiled annually, describes a variety of common scams that taxpayers may encounter. Many of these schemes peak during filing season as people prepare their returns or hire others to help them.
ReplyDelete“Taxpayers should avoid unscrupulous promoters who encourage the use of phony tax shelters designed to avoid paying what is owed,” said IRS Commissioner John Koskinen. “These scams can end up costing taxpayers more in penalties, back taxes and interest than they saved in the first place.”
The IRS continues to address those using abusive shelters through audits, litigation, published guidance and legislation.
Tax law generally allows businesses to create “captive” insurance companies to protect against certain risks. Traditional captive insurance typically allows a taxpayer to reduce insurance costs. The insured business claims deductions for premiums paid for insurance policies. Those amounts are paid, either as insurance premiums or reinsurance premiums, to a “captive” insurance company owned by the insured or parties related to the insured.
Under section 831(b) of the tax code, captive insurers that qualify as small insurance companies can elect to exclude limited amounts of annual net premiums from income, so that the captive pays tax only on its investment income.
In abusive “micro-captive” structures, promoters, accountants or wealth planners persuade owners of closely held entities to participate in schemes that lack many of the attributes of genuine insurance. For example, coverages may insure implausible risks, fail to match genuine business needs or duplicate the taxpayer’s commercial coverages. Premium amounts may be unsupported by underwriting or actuarial analysis, may be geared to a desired deduction amount or may be significantly higher than premiums for comparable commercial coverage.
Policies may contain vague, ambiguous or deceptive terms and otherwise fail to meet industry or regulatory standards. Claims administration processes may be insufficient or altogether absent. Insureds may fail to file claims that are seemingly covered by the captive insurance.
In February 2014, proposed Treasury regulations were issued which, when finalized, will change the way in which most VEBA’s in the 6th Circuit (Michiganre tax liability.
ReplyDelete