Thank you for your interest in learning more about the 419 plan promoter that was recently sued by the U.S. District Attorney in the Northern District of Illinois.
As I indicated in my newsletter, this is a good reminder for everyone that if it sounds too good to be true, that may really be the case.
And even if a tax structure is legitimate, if promoters over promote and flaunt it in the face of the IRS, typically the IRS issues negative press, or in this case negative Revenue Rulings, to throw cold water on it (and also in this case 419 plans funded with life insurance were added to the listed tax transaction list).
In re Indianapolis Life Ins. Co. Internal Revenue Service § 412(i) Plans Life Insurance Marketing Litig., (MDL No. 1983), was originally created to centralize claims relating to the design, marketing, and sale of specially designed life insurance policies used to fund defined benefit pension plans under § 412(i) of the Internal Revenue Code. Indianapolis Life recently requested that the proceeding be expanded to include cases, such as Paul v. Aviva Life and Annuity Company (the successor to Indianapolis Life), which assert claims relating to employee benefit plans formed under § 419 of the tax code because the core factual allegations asserted in these actions are nearly identical, with each asserting a variety of fraud-based claims relating to the design, marketing, and sale of certain Indianapolis Life insurance policies used by the plaintiffs to fund employee benefit plans for their small businesses.
On August 10, 2009, the MDL Panel issued an order transferring Paul to MDL No. 1983 for centralized pretrial proceedings. The MDL Panel recognized the “common questions of fact” between the actions and noted that “[t]he previously centralized MDL No. 1983 actions involve the funding of small business defined benefit pension plans with Indianapolis Life insurance policies which were represented to be in compliance with U.S. Internal Revenue Service (I.R.S.) § 412(i). Paul involves similar allegations involving Indianapolis Life policies used to fund small business I.R.S. § 419 welfare benefit plans.” The MDL Panel noted that although “Paul may involve some unique questions of fact relating to § 419 plans, the transferee judge can establish a separate track, if necessary, to address any unique factual and legal issues which may arise.” The MDL Panel also renamed MDL No. 1983 “In re Indianapolis Life Ins. Co. I.R.S. § 412(i) and § 419 Plans Life Insurance Marketing Litig.” to reflect the inclusion of cases asserting claims relating to § 419 welfare benefit plans.
419 and 412 Plan Fraud You think you know what you are getting when you buy an insurance plan, but what do you do when you find out that your plan does not work they way you thought?
If you have been misled by your insurance broker, you may have been the victim of fraud. We protect the rights of the victims of 419 and 412 plan fraud. · Have you purchased an IRC 419 Employee Welfare Benefit Plan after being told the contributions were fully deductible from federal and state income taxes, only to find out that this was not the case? · Did you purchase a trust you may not have needed, funded with substantial amounts of life insurance because you were told you could build up cash value tax-free and then have use of the funds tax-free? If you have been misled about information regarding your employee welfare benefits, you may have been the victim of 419 and 412 plan fraud. When consumers are misled and given false information by insurance brokers, they have the right to sue the fraudulent agents and insurance company that sold the plan.
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
ReplyDelete419 Plan Promoter Sued
Thank you for your interest in learning more about the 419 plan promoter that was recently sued by the U.S. District Attorney in the Northern District of Illinois.
As I indicated in my newsletter, this is a good reminder for everyone that if it sounds too good to be true, that may really be the case.
And even if a tax structure is legitimate, if promoters over promote and flaunt it in the face of the IRS, typically the IRS issues negative press, or in this case negative Revenue Rulings, to throw cold water on it (and also in this case 419 plans funded with life insurance were added to the listed tax transaction list).
In re Indianapolis Life Ins. Co. Internal Revenue Service § 412(i) Plans Life Insurance Marketing Litig., (MDL No. 1983), was originally created to centralize claims relating to the design, marketing, and sale of specially designed life insurance policies used to fund defined benefit pension plans under § 412(i) of the Internal Revenue Code. Indianapolis Life recently requested that the proceeding be expanded to include cases, such as Paul v. Aviva Life and Annuity Company (the successor to Indianapolis Life), which assert claims relating to employee benefit plans formed under § 419 of the tax code because the core factual allegations asserted in these actions are nearly identical, with each asserting a variety of fraud-based claims relating to the design, marketing, and sale of certain Indianapolis Life insurance policies used by the plaintiffs to fund employee benefit plans for their small businesses.
ReplyDeleteOn August 10, 2009, the MDL Panel issued an order transferring Paul to MDL No. 1983 for centralized pretrial proceedings. The MDL Panel recognized the “common questions of fact” between the actions and noted that “[t]he previously centralized MDL No. 1983 actions involve the funding of small business defined benefit pension plans with Indianapolis Life insurance policies which were represented to be in compliance with U.S. Internal Revenue Service (I.R.S.) § 412(i). Paul involves similar allegations involving Indianapolis Life policies used to fund small business I.R.S. § 419 welfare benefit plans.” The MDL Panel noted that although “Paul may involve some unique questions of fact relating to § 419 plans, the transferee judge can establish a separate track, if necessary, to address any unique factual and legal issues which may arise.” The MDL Panel also renamed MDL No. 1983 “In re Indianapolis Life Ins. Co. I.R.S. § 412(i) and § 419 Plans Life Insurance Marketing Litig.” to reflect the inclusion of cases asserting claims relating to § 419 welfare benefit plans.
Help with Common IRS Problems
ReplyDeleteThursday, June 26, 2014
419 and 412 Plan Fraud
You think you know what you are getting when you buy an insurance plan, but what do you do when you find out that your plan does not work they way you thought?
If you have been misled by your insurance broker, you may have been the victim of fraud. We protect the rights of the victims of 419 and 412 plan fraud.
· Have you purchased an IRC 419 Employee Welfare Benefit Plan after being told the contributions were fully deductible from federal and state income taxes, only to find out that this was not the case?
· Did you purchase a trust you may not have needed, funded with substantial amounts of life insurance because you were told you could build up cash value tax-free and then have use of the funds tax-free?
If you have been misled about information regarding your employee welfare benefits, you may have been the victim of 419 and 412 plan fraud.
When consumers are misled and given false information by insurance brokers, they have the right to sue the fraudulent agents and insurance company that sold the plan.
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