Thursday, May 28, 2015

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

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

First the IRS started auditing § 419 plans in the 1990s, and then continued going after § 412(i) and other plans that they considered abusive, listed, or reportable transactions, or substantially similar to such transactions. If an IRS audit disallows the § 419 plan or the § 412(i) plan, not only does the taxpayer lose the deduction and pay interest and penalties, but then the IRS comes back under IRC 6707A and imposes large fines for not properly filing.

Insurance agents, financial planners and even accountants sold many of these plans. The main motivations for buying into one were large tax deductions. The motivation for the sellers of the plans was the very large life insurance premiums generated. These plans, which were vetted by the insurance companies, put lots of insurance on the books. Some of these plans continue to be sold, even after IRS disallowances and lawsuits against insurance agents, plan promoters and insurance companies.
As the IRS started going after 419 and 412i plans people started selling captive insurance and section 79 plans.
The primary use of a captive must be for bona fide risk management purposes, and not to save taxes. 

http://www.hg.org/article.asp?id=35505

1 comment:

  1. http://www.section79problem.com/additional-resources-and-testimonials.html


    Internal Revenue Service United States Department of the Treasury

    ADDITIONAL EMAILS WITH THE IRS



    Sent: Monday, November 28, 2:01 PM
    To: Itzkowitz Ronald R
    Subject: Lance Wallach




    Hope all is well with you. I never heard from your contact about the abusive shelter information that you sent to him. This stuff on section 79 and captive is not all over the net and is sold by the same promoters that used to sell the 412i and 419 scams??????

    ​Lance Wallach




    Sent: Monday, November 28, 3:36 PM
    To: Havicon Jon S
    Cc: 'LAWALLACH@aol.com'
    Subject: RE: Lance Wallach




    Hi, Jon,
    Would you please follow-up with your contact.

    Thanks,
    Ron




    From:Jon Havicon
    To: Lance Wallach
    Sent: 12/22/ 2:36 P.M.
    Subj: IRC 79




    Lance,

    I heard back from my referral contact. She said if you know of any specific examples of abuse in this area, let me know and we'll forward the our Lead Development Center. Thanks.



    Jon S. Havicon

    Internal Revenue Agent




    Lance Wallach
    68 Keswick Lane
    Plainview, NY 11803
    Ph.: (516)938-5007
    Fax: (516)938-6330 www.vebaplan.com

    National Society of Accountants Speaker of The Year


    The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.

    In a message dated 8/5/2015 3:47:17 P.M. Eastern Daylight Time, Dathonie3@aol.com writes:
    http://www.section79problem.com/additional-resources-and-testimonials.html


    Internal Revenue Service United States Department of the Treasury

    ADDITIONAL EMAILS WITH THE IRS



    Sent: Monday, November 28, 2:01 PM
    To: Itzkowitz Ronald R
    Subject: Lance Wallach




    Hope all is well with you. I never heard from your contact about the abusive shelter information that you sent to him. This stuff on section 79 and captive is not all over the net and is sold by the same promoters that used to sell the 412i and 419 scams??????

    ​Lance Wallach




    Sent: Monday, November 28, 3:36 PM
    To: Havicon Jon S
    Cc: 'LAWALLACH@aol.com'
    Subject: RE: Lance Wallach




    Hi, Jon,
    Would you please follow-up with your contact.

    Thanks,
    Ron




    From:Jon Havicon
    To: Lance Wallach
    Sent: 12/22/ 2:36 P.M.
    Subj: IRC 79




    Lance,

    I heard back from my referral contact. She said if you know of any specific examples of abuse in this area, let me know and we'll forward the our Lead Development Center. Thanks.



    Jon S. Havicon

    Internal Revenue Agent

    ReplyDelete