6707A Penalties & 419 Plans Litigation: Court CaseSea Nine Veba

67067A PENALTIES

419 Plan, 412i Plan, Welfare benefit plan assistance, audits & Abusive tax shelters

BENEFIT PLAN ASSISTANCE

Big Trouble Ahead For Many 419 Welfare Benefit Plan and 412i Retirement Plan Participants

Business owners and professionals who have adopted some 419 welfare benefit plan and 412i retirement plan arrangements are in big trouble. The IRS has attacked these arrangements as "listed transactions." Business owners who engage in a "listed transaction" must report such transactions on IRS Form 8886 every year that they are participating in the transaction, and you ARE participating even in years when you DO NOT make any contribution! Internal Revenue Code 6707A imposes severe penalties ($200,000 annually for a business and $100,000 per year for an individual) for failure to file Form 8886 with respect to a listed transaction. Tax Court, according to both the IRS Appeals Office and its own decisions, does not have jurisdiction to abate or lower any penalties imposed by the IRS. Complaints caused Congress to impose a moratorium on collection of Section 6707A penalties. On June 1, 2010, the moratorium ended, and the IRS immediately began sending out notices warning of possible imposition of 6707A penalties. When you get this notice it should be taken very seriously.

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419 Plan, 412i Plan, Welfare benefit plan assistance, audits & Abusive tax shelters

WELFARE BENEFIT PLAN ASSISTANCE

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

IRS Criminal Investigation (CI) has developed a nationally coordinated program to combat these abusive tax schemes. CI's primary focus is on the identification and investigation of the tax scheme promoters as well as those who play a substantial or integral role in facilitating, aiding, assisting, or furthering the abusive tax scheme, such as accountants or lawyers. Just as important is the investigation of investors who knowingly participate in abusive tax schemes.

First the IRS started auditing § 419 plans in the 1990s, and then continued 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.

412i, 412e3, www.412iplans.org Lawline.com Continuing Legal Education

Reportable Transactions & 419 Plans Litigation

Reportable Transactions & 419 Plans Litigation: CJA and associates 419 412i section 79 scam audits...: CJA and associates 419 412i section 79 scam audits lawsuits

Captive Insurance and Section 79 Scams, 419e and 412i Producing Large IRS fines

BENEFIT PLAN SCAMS

6707A Penalties & 419 Plans Litigation: Pacific Life Insurance Co.

6707A PENALTIES