KENNETH ELLIOT: Sea Nine VEBA Important: As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. For...
Wednesday, March 12, 2014 412i-419 Plans: RAMESH SARVA: SARVA 412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
Lance Wallach Shared publicly - Jan 21, 2014 #IRS
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Defendants Organize, Operate and/or promote a scheme-
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Wednesday, March 12, 2014 412i-419 Plans: RAMESH SARVA: SARVA 412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
Lance Wallach Shared publicly - Jan 21, 2014 #IRS
sea nine veba 419 help beta plan 419 IRS audits lawsuits RS to Audit Sea Nine VEBA Participating Employers: Abusive Tax Shelters & 419 Plans Lawsuits: IRS to Audit Sea N...
Defendants Organize, Operate and/or promote a scheme-
Wednesday, March 12, 2014 412i-419 Plans: RAMESH SARVA: SARVA 412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
Lance Wallach Shared publicly - Jan 21, 2014 #IRS
sea nine veba 419 help beta plan 419 IRS audits lawsuits RS to Audit Sea Nine VEBA Participating Employers: Abusive Tax Shelters & 419 Plans Lawsuits: IRS to Audit Sea N...
1 IN THE UNITED STATES DISTRICT COURT FOR THE ... www.gpo.gov/.../USCOURTS-... United States Government Printing Office Nov 12, 2010 - Kenneth Elliott was an employee of Sea Nine and the administrator of the ... Mr. Elliott served two roles in regards to the VEBA plans: one as “the servicing .... items are very significant in sustaining the deductibility of employer ... You've visited this page 5 times. Last visit: 3/3/14 KENNETH ELLIOT: Sea Nine VEBA Important kennethelliotkaeinsuranceco.blogspot.com/.../sea-nine-veba-important.ht... Jan 7, 2014 - As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. You +1'd this Lance Wallach - Google+ - RAMESH SARVA Tuesday, January 7 ...
https://plus.google.com/.../posts/DjEHMr4DaPG by Lance Wallach - in 49 Google+ circles Jan 21, 2014 - Sarva for his part has been marketing Sea Nine's VEBA plans to customers ... Labels: Kae Consulting, Kenneth Elliot, Ramesh Sarva, Sarva, Sea Nine Veba, Vista Barranca ... KENNETH ELLIOT: Sea Nine VEBA Important You visited this page on 3/10/14. VEBA - Who is talking about VEBA on GOO
https://plus.google.com/.../posts/54FkA38WYAB Lance Wallach 3 days ago - 419 & 412i benefit plan,abusive tax shelters, Lance Wallach Expert Witness Friday, March 7, 2014 412i-419 Plans: 412i-419 Plans: KENNETH ELLIOT: Sea Nine ... VEBA - Who is talking about VEBA on GOOGLE-PLUS whotalking.com/google-plus/VEBA Labels: Kae Consulting, Kenneth Elliot, Ramesh Sarva, Sea Nine Veba, Vista Barranca ... 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important Lance Wallach shared this on Google+ welfare benefit plan 419 lawsuit audit www.vebaplan.com for help ... irstaxprobs.blogspot.com/.../welfare-benefit-plan-419-lawsuit-audit_24.h... Jan 24, 2014 - IRS audits section 79 419 412i plans. www.lancewallach.com for help ... Sea Nine VEBA, 419, 412i, IRS audits,Sea Nine VEBA, Benistar, Grist Mill Trust ..... KENNETH ELLIOT: HARM TO THE GOVERNMENT AND THE PUB. ... RAMESH SARVA: Sarva- More You Should Know · RAMESH SARVA: SARVA ... You and Lance Wallach +1'd this Lance Wallach - Google+ - RAMESH SARVA Tuesday, January 7 ...
https://plus.google.com/.../posts/DjEHMr4DaPG by Lance Wallach - in 49 Google+ circles
KENNETH ELLIOT - 412i-419 Plans - Blogger 419plans.blogspot.com/.../412i-419-plans-kenneth-elliot-sea-nine.html 6 days ago - 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important. 412i-419 Plans: KENNETH ... RAMESH SARVA: Sarva- More You Should Know Lance Wallach +1'd this RAMESH SARVA - 412i-419 Plans - Blogger 419plans.blogspot.com/2014/.../412i-419-plans-ramesh-sarva-sarva_7.ht... 6 days ago - 412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA ... 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important. KENNETH ELLIOT - 412i-419 Plans - Blogger 419plans.blogspot.com/.../412i-419-plans-kenneth-elliot-sea-nine_12.ht... 1 day ago - 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important. 412i-419 Plans: ... 412i-419 Plans: RAMESH SARVA: Sarva- More You Shou. 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important 419plans.blogspot.com/.../kenneth-elliot-sea-nine-veba-important.html 6 days ago - KENNETH ELLIOT: Sea Nine VEBA Important: As of August 23,2013, the IRS has .... 412i-419 Plans: RAMESH SARVA: Sarva- More You Shou. 412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important 419plans.blogspot.com/.../kenneth-elliot-sea-nine-veba-important_12.ht... 1 day ago - KENNETH ELLIOT: Sea Nine VEBA Important: As of August 23,2013, the IRS ... 412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: ... RAMESH SARVA - 412i-419 Plans - Blogger
Help with Common IRS Problems: 412i-419 Plans: Help with Common IRS Problems: Mat... Help with Common IRS Problems: 412i-419 Plans: Help with Common IRS Problems: Mat...: 412i-419 Plans: Help with Common IRS Problems: Material Advisors &... : Help with Common IRS Problems: Material Advisors & 419 Plans...
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Search Advanced Search Recent Posts TAX AUDITS Wednesday, May 14, 2014 Listed Transactions Thursday, April 24, 2014 Don’t Give the IRS Every Last Drop Tuesday, April 08, 2014 Section 79 Marketing Tuesday, February 25, 2014 Part of IRS circular 230(5) Marketed opinion — Monday, January 06, 2014 Section 79 Thursday, December 12, 2013 Many small businesses find themselves owing back payroll taxes IRS or state Wednesday, October 30, 2013 Insurance Tuesday, September 17, 2013 Insurance Tuesday, September 17, 2013 VEBA Monday, July 01, 2013 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, 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 more than 20 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 his side has never lost a case. Visit www.Attorneys-USA.org for more on this subject. National Toll Free Number 516-938-5007 Twitter Link lancewallach Follow me on Twitter Twitter RSS Blogroll Lance Wallach Business Valuations Life Insurance Litigation Tax Audit419 TAX AUDITS For Help with CJA and associate,412i,419,Section79, Captive Insurance, IRS Audits and Lawsuits As an expert witness Lance Wallach has never lost a Case, Google Lance Wallach and then Google whomever you are speaking to; Who do you Trust? Lance Wallach Wrote the CPA Guides to Life Insurance. Posted by Lance Wallach at 5/14/2014 1:36 PM Categories: uncategorized Tags: 412i IRS taxshelters tax_shelters lance wallach irs 419
Do I have to file IRS Form 8886 with my 2013 Tax Return?
Any taxpayer participating in a multiple or single employer 419 plan or a 79 plan using cash value life insurance should consider whether to file IRS Form 8886 with their 2013 tax returns. See IRS Notice 2007-83.
The IRS rules provide that any taxpayer who “participates” in a transaction for a year has an obligation to file IRS Form 8886. If a taxpayer has an obligation to file and fails to file timely, the taxpayer will be subject to a penalty under IRC 6707A that is the greater of 75% of the tax benefit shown on the return and the minimum penalty ($5,000 for individuals and $10,000 for businesses). An owner of an S Corporation would be subject to two penatlies, $10,000 at the S Corporation level and a penalty at the personal level.
Sometimes promoters discourage taxpayers from filing Form 8886 as they fear it will create IRS interest in a promoter audit. Accordingly, taxpayers should seek independent advice as to whether their transaction may be treated as a “listed transaction” and if so, whether they have an obligation to file.
Taxpayers should also consider whether they have an obligation to file Forms 8886 for past years. Although the filing of past-due forms will not eliminate the failure to file penalty, it will start the statute of limitations which otherwise may remain open indefinitely under IRC 6501(c)(10).
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 attorneys 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? 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. ABOUT THE AUTHOR: Lance Wallach Lance Wallach, CLU, ChFC, CIMC, 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. Copyright Lance Wallach, CLU, CHFC More information about Lance Wallach, CLU, CHFC 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. 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.
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 attorneys 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? 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. ABOUT THE AUTHOR: Lance Wallach Lance Wallach, CLU, ChFC, CIMC, 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. Copyright Lance Wallach, CLU, CHFC More information about Lance Wallach, CLU, CHFC 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. 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.
Ramesh Sarva Veba Defendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer. Benistar
Sarva- More You Should Know 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 completely legal. He provides potential plan participants with materials (such as the legal opinions by Elliot and Sea Nine) indicating that after 2004 the Sea Nine plans were not in conformity with the relevant provisions of the Tax Code. And he has promoted the concept that participation in the Sea Nine VEBA plans permits underscoring the cash value nature of the universal or whole life policies that the plans purchase for their participants, even though (noted above) a VEBA plan that operates in this fashion evidences experience rating. Posted by Lance Wallach at 1/07/2014 02:05:00 PM Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
Labels: Kae Consulting, Kenneth Elliot, Vista Barranca 5 comments:
lance wallachMarch 7, 2014 at 9:13 AM Failing to File Form 8886 for VEBAs like Sea Nine VEBA create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A. A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A. An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A. Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)! Taxpayers facing these penalties should seek representation with respect to defending their case before the IRS and considering responsibility for the penalty by other parties. Williams Coulson and Michael Lloyd have represented more than 400 taxpayers in audits before the IRS for participation in single and multiple employer 419 plans such as the Sea Nine VEBA, CJA Titanium and Prepare Plans, Cronin 419 and 79 Plans, Professional Benefit Trust ("PBT") and Niche Plans
Ramesh Sarva Veba Defendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer. Benistar
Sarva- More You Should Know 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 completely legal. He provides potential plan participants with materials (such as the legal opinions by Elliot and Sea Nine) indicating that after 2004 the Sea Nine plans were not in conformity with the relevant provisions of the Tax Code. And he has promoted the concept that participation in the Sea Nine VEBA plans permits underscoring the cash value nature of the universal or whole life policies that the plans purchase for their participants, even though (noted above) a VEBA plan that operates in this fashion evidences experience rating. Posted by Lance Wallach at 1/07/2014 02:05:00 PM Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
Labels: Kae Consulting, Kenneth Elliot, Vista Barranca 5 comments:
lance wallachMarch 7, 2014 at 9:13 AM Failing to File Form 8886 for VEBAs like Sea Nine VEBA create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A. A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A. An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A. Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)! Taxpayers facing these penalties should seek representation with respect to defending their case before the IRS and considering responsibility for the penalty by other parties. Williams Coulson and Michael Lloyd have represented more than 400 taxpayers in audits before the IRS for participation in single and multiple employer 419 plans such as the Sea Nine VEBA, CJA Titanium and Prepare Plans, Cronin 419 and 79 Plans, Professional Benefit Trust ("PBT") and Niche Plans
412i and 419e plans litigation. IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS, Benistar, 412i Lawsuits, 419 lawsuits, IRS Audits, Expert Witness Lance Wallach IRS to Audit Sea Nine VEBA Participating Employers IRS to Audit Sea Nine VEBA Participating Employers - Finance - Taxes Posted by Lance Wallach at 7/08/2014 06:56:00 PM Labels: 419 Plan, Lance Wallach, Veba Plan 2 comments:
Robert ShermanMarch 9, 2016 at 7:02 AM Benistar Benistar 419 Plan Grist Mill Trust Nova,Nutmeg Trust Niche Sea Nine Veba SADI Trust Beta 419 Millennium Bisys Creative Services Group Sterling Benefit Plan Compass 419 Niche 419 CRESP American Benefits Trust National Benefit Plan and Trust ABT Professional Benefits Trust Old Mutual Allmerica Financial American Heritage Life Commercial Union Life National Life of Vermont Old Line Life Security Mutual Life West Coast Life ECI Pension Services Pension Professionals of America ABI Hartford AIG Indy Life Indianapolis Life Advantage Jacksom National Jefferson-Pilot Life Lincoln Benefit Life Lincoln National Life Manufacturers Life Massachusetts Mutual Metropolitan Life Midland Life Minnesota Mutual Principal Life Reliastar Security Mutual USG Annuity & Life Western Reserve Life Assurance Old Mutual Allmerica Financial American Heritage Life Commercial Union Life National Life of Vermont Old Line Life Security Mutual Life West Coast Life For Help With Any of these contact Lance Wallach or Google Lance Wallach
412i and 419e plans litigation. IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS, Benistar, 412i Lawsuits, 419 lawsuits, IRS Audits, Expert Witness Lance Wallach IRS to Audit Sea Nine VEBA Participating Employers IRS to Audit Sea Nine VEBA Participating Employers - Finance - Taxes Posted by Lance Wallach at 7/08/2014 06:56:00 PM Labels: 419 Plan, Lance Wallach, Veba Plan 2 comments:
Robert ShermanMarch 9, 2016 at 7:02 AM Benistar Benistar 419 Plan Grist Mill Trust Nova,Nutmeg Trust Niche Sea Nine Veba SADI Trust Beta 419 Millennium Bisys Creative Services Group Sterling Benefit Plan Compass 419 Niche 419 CRESP American Benefits Trust National Benefit Plan and Trust ABT Professional Benefits Trust Old Mutual Allmerica Financial American Heritage Life Commercial Union Life National Life of Vermont Old Line Life Security Mutual Life West Coast Life ECI Pension Services Pension Professionals of America ABI Hartford AIG Indy Life Indianapolis Life Advantage Jacksom National Jefferson-Pilot Life Lincoln Benefit Life Lincoln National Life Manufacturers Life Massachusetts Mutual Metropolitan Life Midland Life Minnesota Mutual Principal Life Reliastar Security Mutual USG Annuity & Life Western Reserve Life Assurance Old Mutual Allmerica Financial American Heritage Life Commercial Union Life National Life of Vermont Old Line Life Security Mutual Life West Coast Life For Help With Any of these contact Lance Wallach or Google Lance Wallach
US Says Benefit Plan Scheme Costs Millions In Taxes By Gavin Broady
Law360, New York (October 11, 2013, 2:38 PM ET) -- The U.S. government sued an insurance program marketer in California federal court Wednesday in an effort to shut down a purported scheme pushing small businesses to buy into employee benefits programs it claims are structured to cheat the government out of millions of dollars in taxes. The government’s complaint accuses KAE Insurance Services Inc. and affiliated entities of hawking voluntary employee beneficiary association plans on the misleading promise that the participating businesses can legally write off plan contributions as federal income tax deductions while still recouping the full value of those contributions down the road, according to the complaint.
The defendants have long been well aware, however, that the plans as structured violate the Internal Revenue Code and regulations promulgated by the U.S. Department of the Treasury, and their activities must be halted via a court injunction, the government argues.
“Defendants have continued to falsely claim that the VEBA plans in fact comply with the tax laws, and manage and promote them to this day despite their documented knowledge of the illegality of the plans,” the government said. “The result is significant amounts of lost tax revenue to the treasury based on erroneously claimed tax deductions.”
The complaint alleges that named defendant and California resident Kennet
We 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.
We 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.
Attorneys for the United States of America 16 17 18 19 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION 20 United States of America, 21 ' 22 Plaintiff, vs. COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF 23 Kenneth Elliott d/b/a KAE Insurance Service~ Inc., Vista Barranca, Inc., 24 and KA~ Consulting· Sea Nine Associates, Inc., and Ramesh Sarva, 25 26 27 28 Defendants.
Attorneys for the United States of America 16 17 18 19 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION 20 United States of America, 21 ' 22 Plaintiff, vs. COMPLAINT FOR PERMANENT INJUNCTION AND OTHER RELIEF 23 Kenneth Elliott d/b/a KAE Insurance Service~ Inc., Vista Barranca, Inc., 24 and KA~ Consulting· Sea Nine Associates, Inc., and Ramesh Sarva, 25 26 27 28 Defendants.
Ramesh Sarva Veba Defendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer.
Ramesh Sarva Veba Defendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer.
Tuesday, January 7, 2014 Sea Nine VEBA Important As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. For those taxpayers alone , the IRS assessed a total of $4,852,106in additional taxes, or an average additional tax of $404,342 per audit. Because Sarva has acknowledged directing atleast 40 of his customers to Sea Nine , the total amount of harm to the Treasury he has caused through promotion of improper VEBA plans is likely almost four times higher.
Tuesday, January 7, 2014 Sea Nine VEBA Important As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. For those taxpayers alone , the IRS assessed a total of $4,852,106in additional taxes, or an average additional tax of $404,342 per audit. Because Sarva has acknowledged directing atleast 40 of his customers to Sea Nine , the total amount of harm to the Treasury he has caused through promotion of improper VEBA plans is likely almost four times higher.
IRS audits sea nine veba, ken elliot and ramesh sarva sued. Published on February 11, 2016 LikedUnlikeIRS audits sea nine veba, ken elliot and ramesh sarva sued.1Comment14ShareShare IRS audits sea nine veba, ken elliot and ramesh sarva sued.7 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 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 IRScomplaint. 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 of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
LikedUnlikeIRS audits sea nine veba, ken elliot and ramesh sarva sued.CommentShareShare IRS audits sea nine veba, ken elliot and ramesh sarva sued. Report this Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 346 posts 14 commentsRecommended
IRS audits sea nine veba, ken elliot and ramesh sarva sued. Published on February 11, 2016 LikedUnlikeIRS audits sea nine veba, ken elliot and ramesh sarva sued.1Comment14ShareShare IRS audits sea nine veba, ken elliot and ramesh sarva sued.7 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 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 IRScomplaint. 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 of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
LikedUnlikeIRS audits sea nine veba, ken elliot and ramesh sarva sued.CommentShareShare IRS audits sea nine veba, ken elliot and ramesh sarva sued. Report this Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 346 posts 14 commentsRecommended
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes Edit article Published on January 4, 2017 LikedUnlikeFailing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes1Comment0ShareShare Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes2 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A. A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A. An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A. Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes Edit article Published on January 4, 2017 LikedUnlikeFailing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes1Comment0ShareShare Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes2 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A. A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A. An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A. Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes Published on January 4, 2017 LikeFailing to File Form 8886 for VEBAs like Sea Nine VE
Notice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
Notice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
419 welfare benifit plan, get your money back, 2433 views, 21 likes Published on Published onDecember 29, 2017 Edit article View stats Lance Wallach Lance Wallach Abusive tax shelters, 419, section 79, 412i micro captive insurance, VEBA, expert witness, author, speaker 729 articles Like 0 Comment 0
The Internal Revenue Service and the Treasury Department cautioned taxpayers about participating in certain trust arrangements being sold to professional corporations and other small businesses as welfare benefit funds and identified some of the arrangements as listed transactions.
There are many legitimate welfare benefit funds that provide benefits, such as health insurance and life insurance, to employees and retirees. However, the arrangements the IRS is cautioning employers about primarily benefit the owners or other key employees of businesses, sometimes in the form of distributions of cash, loans, or life insurance policies.
“The guidance targets specific abuses involving a limited group of arrangements that claim to be welfare benefit funds,” said Donald L. Korb, Chief Counsel for the IRS. “Today’s action sends a strong signal that these abusive schemes must stop.”
The guidance explains that, depending on the facts and circumstances, a particular arrangement could be providing dividends to the owners of a business that are includible in the owners’ income and not deductible by the business. The arrangement could also be a plan of nonqualified deferred compensation. Even some arrangements providing welfare benefits may have tax consequences different than what is claimed.
In Notice 2007-83, the IRS identified certain trust arrangements involving cash value life insurance policies, and substantially similar arrangements, as listed transactions. If a transaction is designated as a listed transaction, affected persons have disclosure obligations and may be subject to applicable penalties. Taxpayers who otherwise would be required to file a disclosure statement prior to Jan. 15, 2008, as a result of Notice 2007-83 have until Jan. 15, 2008, to make the disclosure.
In Notice 2007-84, the IRS cautioned taxpayers that the tax treatment of trusts that, in form, provide post-retirement medical and life insurance benefits to owners and other key employees may vary from the treatment claimed. The IRS may issue further guidance to address these arrangements, and taxpayers should not assume that the guidance will be applied prospectively only.
Today, the IRS also issued related Revenue Ruling 2007-65 to address situations where an arrangement is considered a welfare benefit fund but the employer’s deduction for its contributions to the fund is denied in whole or part for premiums paid by the trust on cash value life insurance policies.
412i-419 Plans
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412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
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412i-419 Plans: RAMESH SARVA: SARVA
412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
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412i-419 Plans: RAMESH SARVA: SARVA
412i-419 Plans: RAMESH SARVA: SARVA: RAMESH SARVA: SARVA : Defendants have also directly and indirectly promoted the VEBA plan scheme to prospective participants. Sarva for his ...
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Nov 12, 2010 - Kenneth Elliott was an employee of Sea Nine and the administrator of the ... Mr. Elliott served two roles in regards to the VEBA plans: one as “the servicing .... items are very significant in sustaining the deductibility of employer ...
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KENNETH ELLIOT: Sea Nine VEBA Important
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Jan 7, 2014 - As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva.
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Jan 21, 2014 - Sarva for his part has been marketing Sea Nine's VEBA plans to customers ... Labels: Kae Consulting, Kenneth Elliot, Ramesh Sarva, Sarva, Sea Nine Veba, Vista Barranca ... KENNETH ELLIOT: Sea Nine VEBA Important
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Jan 24, 2014 - IRS audits section 79 419 412i plans. www.lancewallach.com for help ... Sea Nine VEBA, 419, 412i, IRS audits,Sea Nine VEBA, Benistar, Grist Mill Trust ..... KENNETH ELLIOT: HARM TO THE GOVERNMENT AND THE PUB. ... RAMESH SARVA: Sarva- More You Should Know · RAMESH SARVA: SARVA ...
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412i-419 Plans: KENNETH ELLIOT: Sea Nine VEBA Important
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6 days ago - KENNETH ELLIOT: Sea Nine VEBA Important: As of August 23,2013, the IRS has .... 412i-419 Plans: RAMESH SARVA: Sarva- More You Shou.
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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, 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 more than 20 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 his side has never lost a case. Visit www.Attorneys-USA.org for more on this subject. National Toll Free Number 516-938-5007
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Posted by Lance Wallach at 5/14/2014 1:36 PM
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Tags: 412i IRS taxshelters tax_shelters lance wallach irs 419
Do I have to file IRS Form 8886 with my 2013 Tax Return?
ReplyDeleteAny taxpayer participating in a multiple or single employer 419 plan or a 79 plan using cash value life insurance should consider whether to file IRS Form 8886 with their 2013 tax returns. See IRS Notice 2007-83.
The IRS rules provide that any taxpayer who “participates” in a transaction for a year has an obligation to file IRS Form 8886. If a taxpayer has an obligation to file and fails to file timely, the taxpayer will be subject to a penalty under IRC 6707A that is the greater of 75% of the tax benefit shown on the return and the minimum penalty ($5,000 for individuals and $10,000 for businesses). An owner of an S Corporation would be subject to two penatlies, $10,000 at the S Corporation level and a penalty at the personal level.
Sometimes promoters discourage taxpayers from filing Form 8886 as they fear it will create IRS interest in a promoter audit. Accordingly, taxpayers should seek independent advice as to whether their transaction may be treated as a “listed transaction” and if so, whether they have an obligation to file.
Taxpayers should also consider whether they have an obligation to file Forms 8886 for past years. Although the filing of past-due forms will not eliminate the failure to file penalty, it will start the statute of limitations which otherwise may remain open indefinitely under IRC 6501(c)(10).
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 attorneys 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:
ReplyDelete€ 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?
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.
ABOUT THE AUTHOR: Lance Wallach
Lance Wallach, CLU, ChFC, CIMC, 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.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
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.
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.
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 attorneys 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:
ReplyDelete€ 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?
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.
ABOUT THE AUTHOR: Lance Wallach
Lance Wallach, CLU, ChFC, CIMC, 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.
Copyright Lance Wallach, CLU, CHFC
More information about Lance Wallach, CLU, CHFC
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.
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.
Ramesh Sarva Veba
ReplyDeleteDefendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer. Benistar
Sarva- More You Should Know
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 completely legal. He provides potential plan participants with materials (such as the legal opinions by Elliot and Sea Nine) indicating that after 2004 the Sea Nine plans were not in conformity with the relevant provisions of the Tax Code. And he has promoted the concept that participation in the Sea Nine VEBA plans permits underscoring the cash value nature of the universal or whole life policies that the plans purchase for their participants, even though (noted above) a VEBA plan that operates in this fashion evidences experience rating.
Posted by Lance Wallach at 1/07/2014 02:05:00 PM
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5 comments:
lance wallachMarch 7, 2014 at 9:13 AM
Failing to File Form 8886 for VEBAs like Sea Nine VEBA create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A.
A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A.
An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A.
Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Taxpayers facing these penalties should seek representation with respect to defending their case before the IRS and considering responsibility for the penalty by other parties. Williams Coulson and Michael Lloyd have represented more than 400 taxpayers in audits before the IRS for participation in single and multiple employer 419 plans such as the Sea Nine VEBA, CJA Titanium and Prepare Plans, Cronin 419 and 79 Plans, Professional Benefit Trust ("PBT") and Niche Plans
Ramesh Sarva Veba
ReplyDeleteDefendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer. Benistar
Sarva- More You Should Know
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 completely legal. He provides potential plan participants with materials (such as the legal opinions by Elliot and Sea Nine) indicating that after 2004 the Sea Nine plans were not in conformity with the relevant provisions of the Tax Code. And he has promoted the concept that participation in the Sea Nine VEBA plans permits underscoring the cash value nature of the universal or whole life policies that the plans purchase for their participants, even though (noted above) a VEBA plan that operates in this fashion evidences experience rating.
Posted by Lance Wallach at 1/07/2014 02:05:00 PM
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5 comments:
lance wallachMarch 7, 2014 at 9:13 AM
Failing to File Form 8886 for VEBAs like Sea Nine VEBA create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A.
A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A.
An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A.
Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Taxpayers facing these penalties should seek representation with respect to defending their case before the IRS and considering responsibility for the penalty by other parties. Williams Coulson and Michael Lloyd have represented more than 400 taxpayers in audits before the IRS for participation in single and multiple employer 419 plans such as the Sea Nine VEBA, CJA Titanium and Prepare Plans, Cronin 419 and 79 Plans, Professional Benefit Trust ("PBT") and Niche Plans
ReplyDelete412i and 419e plans litigation. IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS, Benistar, 412i Lawsuits, 419 lawsuits, IRS Audits, Expert Witness Lance Wallach
IRS to Audit Sea Nine VEBA Participating Employers
IRS to Audit Sea Nine VEBA Participating Employers - Finance - Taxes
Posted by Lance Wallach at 7/08/2014 06:56:00 PM
Labels: 419 Plan, Lance Wallach, Veba Plan
2 comments:
Robert ShermanMarch 9, 2016 at 7:02 AM
Benistar
Benistar 419 Plan
Grist Mill Trust
Nova,Nutmeg Trust
Niche
Sea Nine Veba
SADI Trust
Beta 419
Millennium
Bisys
Creative Services Group
Sterling Benefit Plan
Compass 419
Niche 419
CRESP
American Benefits Trust
National Benefit Plan and Trust
ABT
Professional Benefits Trust
Old Mutual
Allmerica Financial
American Heritage Life
Commercial Union Life
National Life of Vermont
Old Line Life
Security Mutual Life
West Coast Life
ECI Pension Services
Pension Professionals of America
ABI
Hartford
AIG
Indy Life
Indianapolis Life
Advantage
Jacksom National
Jefferson-Pilot Life
Lincoln Benefit Life
Lincoln National Life
Manufacturers Life
Massachusetts Mutual
Metropolitan Life
Midland Life
Minnesota Mutual
Principal Life
Reliastar
Security Mutual
USG Annuity & Life
Western Reserve Life Assurance
Old Mutual
Allmerica Financial
American Heritage Life
Commercial Union Life
National Life of Vermont
Old Line Life
Security Mutual Life
West Coast Life
For Help With Any of these contact Lance Wallach or Google Lance Wallach
ReplyDelete412i and 419e plans litigation. IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS, Benistar, 412i Lawsuits, 419 lawsuits, IRS Audits, Expert Witness Lance Wallach
IRS to Audit Sea Nine VEBA Participating Employers
IRS to Audit Sea Nine VEBA Participating Employers - Finance - Taxes
Posted by Lance Wallach at 7/08/2014 06:56:00 PM
Labels: 419 Plan, Lance Wallach, Veba Plan
2 comments:
Robert ShermanMarch 9, 2016 at 7:02 AM
Benistar
Benistar 419 Plan
Grist Mill Trust
Nova,Nutmeg Trust
Niche
Sea Nine Veba
SADI Trust
Beta 419
Millennium
Bisys
Creative Services Group
Sterling Benefit Plan
Compass 419
Niche 419
CRESP
American Benefits Trust
National Benefit Plan and Trust
ABT
Professional Benefits Trust
Old Mutual
Allmerica Financial
American Heritage Life
Commercial Union Life
National Life of Vermont
Old Line Life
Security Mutual Life
West Coast Life
ECI Pension Services
Pension Professionals of America
ABI
Hartford
AIG
Indy Life
Indianapolis Life
Advantage
Jacksom National
Jefferson-Pilot Life
Lincoln Benefit Life
Lincoln National Life
Manufacturers Life
Massachusetts Mutual
Metropolitan Life
Midland Life
Minnesota Mutual
Principal Life
Reliastar
Security Mutual
USG Annuity & Life
Western Reserve Life Assurance
Old Mutual
Allmerica Financial
American Heritage Life
Commercial Union Life
National Life of Vermont
Old Line Life
Security Mutual Life
West Coast Life
For Help With Any of these contact Lance Wallach or Google Lance Wallach
US Says Benefit Plan Scheme Costs Millions In Taxes
ReplyDeleteBy Gavin Broady
Law360, New York (October 11, 2013, 2:38 PM ET) -- The U.S. government sued an insurance program marketer in California federal court Wednesday in an effort to shut down a purported scheme pushing small businesses to buy into employee benefits programs it claims are structured to cheat the government out of millions of dollars in taxes.
The government’s complaint accuses KAE Insurance Services Inc. and affiliated entities of hawking voluntary employee beneficiary association plans on the misleading promise that the participating businesses can legally write off plan contributions as federal income tax deductions while still recouping the full value of those contributions down the road, according to the complaint.
The defendants have long been well aware, however, that the plans as structured violate the Internal Revenue Code and regulations promulgated by the U.S. Department of the Treasury, and their activities must be halted via a court injunction, the government argues.
“Defendants have continued to falsely claim that the VEBA plans in fact comply with the tax laws, and manage and promote them to this day despite their documented knowledge of the illegality of the plans,” the government said. “The result is significant amounts of lost tax revenue to the treasury based on erroneously claimed tax deductions.”
The complaint alleges that named defendant and California resident Kennet
Sea 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.
Sea 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.
Attorneys for the United States of America
ReplyDelete16
17
18
19
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
20 United States of America,
21
' 22
Plaintiff,
vs.
COMPLAINT FOR PERMANENT
INJUNCTION AND OTHER
RELIEF
23 Kenneth Elliott d/b/a KAE Insurance Service~ Inc., Vista Barranca, Inc.,
24 and KA~ Consulting· Sea Nine
Associates, Inc., and Ramesh Sarva,
25
26
27
28
Defendants.
Attorneys for the United States of America
ReplyDelete16
17
18
19
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
WESTERN DIVISION
20 United States of America,
21
' 22
Plaintiff,
vs.
COMPLAINT FOR PERMANENT
INJUNCTION AND OTHER
RELIEF
23 Kenneth Elliott d/b/a KAE Insurance Service~ Inc., Vista Barranca, Inc.,
24 and KA~ Consulting· Sea Nine
Associates, Inc., and Ramesh Sarva,
25
26
27
28
Defendants.
Ramesh Sarva Veba
ReplyDeleteDefendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer.
Ramesh Sarva Veba
ReplyDeleteDefendant Ramesh Sarva is a CPA who has been steering his customers toward VEBA plans for over 20 years- and in particular, toward Sea Nine-administered VEBA plans. He promotes the plans' false benefits while also rebroadcasting the false statements that Elliot and Sea Nine make about the plans they operate and administer.
Kenneth Elliot KAE Insurance Co
ReplyDelete419 Plan, 412i plan, Captive Insurance Plan, Section 79 Plan, Benistar
Tuesday, January 7, 2014
Sea Nine VEBA Important
As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. For those taxpayers alone , the IRS assessed a total of $4,852,106in additional taxes, or an average additional tax of $404,342 per audit. Because Sarva has acknowledged directing atleast 40 of his customers to Sea Nine , the total amount of harm to the Treasury he has caused through promotion of improper VEBA plans is likely almost four times higher.
Kenneth Elliot KAE Insurance Co
ReplyDelete419 Plan, 412i plan, Captive Insurance Plan, Section 79 Plan, Benistar
Tuesday, January 7, 2014
Sea Nine VEBA Important
As of August 23,2013, the IRS has closed audits of 12 Sea Nine VEBA plan-participating taxpayers who were referred to Sea Nine by Sarva. For those taxpayers alone , the IRS assessed a total of $4,852,106in additional taxes, or an average additional tax of $404,342 per audit. Because Sarva has acknowledged directing atleast 40 of his customers to Sea Nine , the total amount of harm to the Treasury he has caused through promotion of improper VEBA plans is likely almost four times higher.
IRS audits sea nine veba, ken elliot and ramesh sarva sued.
ReplyDeletePublished on February 11, 2016
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Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
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 IRScomplaint. 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 of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
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IRS audits sea nine veba, ken elliot and ramesh sarva sued.
ReplyDeletePublished on February 11, 2016
LikedUnlikeIRS audits sea nine veba, ken elliot and ramesh sarva sued.1Comment14ShareShare IRS audits sea nine veba, ken elliot and ramesh sarva sued.7
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
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 IRScomplaint. 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 of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
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Lance Wallach
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Business Owner at National Offices of Lance Wallach
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Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes
ReplyDeleteEdit article
Published on January 4, 2017
LikedUnlikeFailing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes1Comment0ShareShare Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes2
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A.
A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A.
An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A.
Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes
ReplyDeleteEdit article
Published on January 4, 2017
LikedUnlikeFailing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes1Comment0ShareShare Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes2
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
Failing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties.
Taxpayers who participate in 419A(f)(6) multiple employer plans like the Sea Nine VEBA are often very discouraged to find the IRS applying multiple penalties for the failure to file a form that they had no reason to know was required. The form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit plan (or 419 plan). The following example illustrates the penalties that can apply.
Assume we have an S corporation taxpayer who deducted $100,000 to a multiple employer 419 VEBA for years 2008, 2009 and 2010. The IRS audits the taxpayer and disallows the $100,000 deduction. In most cases, the IRS will provide for the adjustment at the individual 1040 level and other than some interest, the taxpayer will be in a position similar to if the transaction had not occurred. If, however, the taxpayer was not told to file Form 8886 for every year of participation and in fact did not file, the IRS asserts the following additional penalties:
A $10,000 penalty at the S Corporation level for years 2008 – 2010 for the failure to file Form 8886. Total Penalty = $30,000. See Code Section 6707A.
A penalty at the individual level of 75% of the tax benefit for years 2008-2010 for the failure to file Form 8886. This translates into a penalty of $26,250 for each year. Total Penalty = $78,750. See Code Section 6707A.
An accuracy related penalty of 30% of the income tax adjustment for years 2008-2010. The worst part of this penalty is that if the taxpayer exercised due diligence and relied on an outside advisor, this penalty would normally be 20% of the tax and could be waived. However, because the Form 8886 was not filed, the penalty is 30% and cannot be waived. Total Penalty = $31,500. See Code Section 6662A.
Grand Total of all Penalties = $140,250 (nearly 50% of the total investment)!
Keep burning bright and let your light illuminate the world around you. Just don't forget that with light comes shadow.
ReplyDeleteFailing to File Form 8886 for VEBAs like Sea Nine VEBA, or any 419,section 79 or small captive,create multiple penalties, 5499 views, 69 likes
ReplyDeletePublished on January 4, 2017
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Notice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
ReplyDeleteNotice 2007-83 - Abusive Trust Arrangements Utilizing Cash Value Life Insurance Policies Purportedly to Provide Welfare Benefits - 2007-45 I.R.B. 1 (transactions in which certain trust arrangements claiming to be welfare benefit funds and involving cash value life insurance policies that are being promoted to and used by taxpayers to improperly claim federal income and employment tax benefits (identified as “listed transactions” on October 17, 2007)).
ReplyDelete419 welfare benifit plan, get your money back, 2433 views, 21 likes
ReplyDeletePublished on Published onDecember 29, 2017
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Lance Wallach
Lance Wallach
Abusive tax shelters, 419, section 79, 412i micro captive insurance, VEBA, expert witness, author, speaker
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The Internal Revenue Service and the Treasury Department cautioned taxpayers about participating in certain trust arrangements being sold to professional corporations and other small businesses as welfare benefit funds and identified some of the arrangements as listed transactions.
There are many legitimate welfare benefit funds that provide benefits, such as health insurance and life insurance, to employees and retirees. However, the arrangements the IRS is cautioning employers about primarily benefit the owners or other key employees of businesses, sometimes in the form of distributions of cash, loans, or life insurance policies.
“The guidance targets specific abuses involving a limited group of arrangements that claim to be welfare benefit funds,” said Donald L. Korb, Chief Counsel for the IRS. “Today’s action sends a strong signal that these abusive schemes must stop.”
The guidance explains that, depending on the facts and circumstances, a particular arrangement could be providing dividends to the owners of a business that are includible in the owners’ income and not deductible by the business. The arrangement could also be a plan of nonqualified deferred compensation. Even some arrangements providing welfare benefits may have tax consequences different than what is claimed.
In Notice 2007-83, the IRS identified certain trust arrangements involving cash value life insurance policies, and substantially similar arrangements, as listed transactions. If a transaction is designated as a listed transaction, affected persons have disclosure obligations and may be subject to applicable penalties. Taxpayers who otherwise would be required to file a disclosure statement prior to Jan. 15, 2008, as a result of Notice 2007-83 have until Jan. 15, 2008, to make the disclosure.
In Notice 2007-84, the IRS cautioned taxpayers that the tax treatment of trusts that, in form, provide post-retirement medical and life insurance benefits to owners and other key employees may vary from the treatment claimed. The IRS may issue further guidance to address these arrangements, and taxpayers should not assume that the guidance will be applied prospectively only.
Today, the IRS also issued related Revenue Ruling 2007-65 to address situations where an arrangement is considered a welfare benefit fund but the employer’s deduction for its contributions to the fund is denied in whole or part for premiums paid by the trust on cash value life insurance policies.
Related Items:
Revenue Ruling 2007-65
Notice 2007-83
Notice 2007-84
KENNETH ELLIOT: Sea Nine VEBA
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