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

Pacific Life Insurance Co.



Gordon Lee

Re: Life Policy # VF51683620

Dear Sir/Madam,

I bought a One Million Dollard Life policy from your company in 2007 for Gordon H. Lee, Welfare Benefit Trust under 419 Plan. I particularly relied on the fact that your company had reviewed the plan and allowed your companies insurance into the plan. I have read a lot about other people being audited in this plan, and also about lawsuits against the plan and your company. I have also read some documents about your executives comments about this plan, and what they should have know with respect to the plan. I have discussed this with a lawyer who has been suing insurance companies in this respect. I do not especially want to sue, I just want to be made whole. If you are interested in discussing this I would like to do so. 

I have also discussed my situation with two people who have been writing extensively about these plans in publications. I told them that I would hope that your excellent company would make good to me, on a plan that they approved putting their insurance into. I told them that they do not have my permission to use my name at this time. If you want to settle with me they will never have my permission.

I got audited in April of 2009 by IRS.  Not only do I have to pay the tax on the income I excluded according to the 419 Plan for the Insurance Premium I paid to Pacific Life, I have to pay interest and penalty.  Most devastatingly is the Sec. 6707A Penalty which was $200,000 for the Trust, and $100,000 for each individual each year. I now understand that the law is changed and the fine for not reporting will be a little less You and your agent never told me that I had to file the forms. I can prove that your company knew that there was a problem with the plan and the IRS.

I did as Kevin Lee, your Broker/Agent to research with Pacific Life about the legality and applicability about this 419 Plan.  And according to Kevin Lee, Pacific LIfe gave a green light on every aspect of this application. I did not want life insurance, just a legitimate tax deduction. I now have life insurance that I did not want, and have lost my tax deduction. I also owe money to the IRS.


Because I partially relied on Pacific Life, therefore, it is would be fair for your company to cover my losses. If I sue I am sure that I will probably win. I have done extensive research into what is happening with respect to your company and these plans. I have also gotten a lot of information from the IRS.

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