Starting
in 2001, and continuing through 2007, Plaintiffs made annual contributions of
$40,000 to the BETA Plan and, "as advised by Rau and Defendants Moritt ... and
Designs," claimed the same amount as annual tax deductions. (Id. ¶¶ 4041.) In 2003, the IRS issued stricter
regulations on multiple-employer benefit plans under Section 419A(f)(6) of the
IRC. (Id. ¶ 34.) In response to those regulations,
Designs signed a BETA Plan Severance Agreement, effective January 1, 2003, that
effectively transformed the BETA Plan from one multiple-employer plan ("MEP")
into several single-employer plans ("SEP"). (Id. ¶¶ 34, 43.) This change in plan structure
resulted in a split-dollar life insurance arrangement for plan participants,
pursuant to which plan benefits would be separated between employers and
shareholder-employees. (Id. ¶ 34.)
In
February 2004, Rau sent a letter to Winebrenner (who presumably forwarded the
letter to Plaintiffs, as they have attached the letter to their Second Amended
Complaint) stating that the IRS regulations had made the BETA Plan strategy
"stronger than ever." (Id. ¶ 42, Ex. C.) Plaintiffs allege, instead,
that the changes made the plan strategy riskier, and that Designs should have
been aware of the risks associated with the regulations and alerted Plaintiffs
to such risks. (Id. ¶ 42.) In December 2004, the BETA Plan
Administrator sent plan participants a letter notifying them of the plan's
re-characterization as a SEP, as described above. (Id. ¶ 45.) The letter informed Plaintiffs that
the changes did not affect them and were made for compliance purposes only. (Id.)
Plaintiffs allege, however, that such changes "solidified the [BETA] Plan as a
deferred compensation plan rather than the legitimate welfare benefit plan it
was [785
F.Supp.2d 242] marketed to be," (id. ¶ 35); that, under the new plan structure,
plan participants' contributions were subject to funding limitations that
rendered Plaintiffs' contributions no longer tax-deductible, (id. ¶¶ 34, 43); and that, had they been properly
informed of how to comply with the IRS regulations, they would not have claimed
plan contributions as deductions, and would have paid the necessary taxes on
such contributions, (id. ¶ 46).
Tuesday, January 21, 2014
ReplyDeleteBETA Plan Strategy
Starting in 2001, and continuing through 2007, Plaintiffs made annual contributions of $40,000 to the BETA Plan and, "as advised by Rau and Defendants Moritt ... and Designs," claimed the same amount as annual tax deductions. (Id. ¶¶ 4041.) In 2003, the IRS issued stricter regulations on multiple-employer benefit plans under Section 419A(f)(6) of the IRC. (Id. ¶ 34.) In response to those regulations, Designs signed a BETA Plan Severance Agreement, effective January 1, 2003, that effectively transformed the BETA Plan from one multiple-employer plan ("MEP") into several single-employer plans ("SEP"). (Id. ¶¶ 34, 43.) This change in plan structure resulted in a split-dollar life insurance arrangement for plan participants, pursuant to which plan benefits would be separated between employers and shareholder-employees. (Id. ¶ 34.)
In February 2004, Rau sent a letter to Winebrenner (who presumably forwarded the letter to Plaintiffs, as they have attached the letter to their Second Amended Complaint) stating that the IRS regulations had made the BETA Plan strategy "stronger than ever." (Id. ¶ 42, Ex. C.) Plaintiffs allege, instead, that the changes made the plan strategy riskier, and that Designs should have been aware of the risks associated with the regulations and alerted Plaintiffs to such risks. (Id. ¶ 42.) In December 2004, the BETA Plan Administrator sent plan participants a letter notifying them of the plan's re-characterization as a SEP, as described above. (Id. ¶ 45.) The letter informed Plaintiffs that the changes did not affect them and were made for compliance purposes only. (Id.) Plaintiffs allege, however, that such changes "solidified the [BETA] Plan as a deferred compensation plan rather than the legitimate welfare benefit plan it was
As an expert witness Lance Wallach has never lost a case. Get your money back and fight IRS.
ReplyDelete412i,419, lawsuits, IRS audits
________________________________________
April 24, 2012 By Lance Wallach, CLU, CHFC
________________________________________
419, 412i, plans are being audited by the IRS. Lawsuits are the result.
Dolan Media Newswires 01/22/
Small Business Retirement Plans Fuel Litigation
Small businesses facing audits and potentially huge tax penalties over certain types of retirement plans are filing lawsuits against those who marketed, designed and sold the plans. The 412(i) and 419(e) plans were marketed in the past several years as a way for small business owners to set up retirement or welfare benefits plans while leveraging huge tax savings, but the IRS put them on a list of abusive tax shelters and has more recently focused audits on them.
The penalties for such transactions are extremely high and can pile up quickly - $100,000 per individual and $200,000 per entity per tax year for each failure to disclose the transaction - often exceeding the disallowed taxes.
There are business owners who owe $6,000 in taxes but have been assessed $1.2 million in penalties. The existing cases involve many types of businesses, including doctors' offices, dental practices, grocery store owners, mortgage companies and restaurant owners. Some are trying to negotiate with the IRS. Others are not waiting. A class action has been filed and cases in several states are ongoing. The business owners claim that they were targeted by insurance companies; and their agents to purchase the plans without any disclosure that the IRS viewed the plans as abusive tax shelters. Other defendants include financial advisors who recommended the plans, accountants who failed to fill out required tax forms and law firms that drafted opinion letters legitimizing the plans, which were used as marketing tools.
A 412(i) plan is a form of defined benefit pension plan. A 419(e) plan is a similar type of health and benefits plan. Typically, these were sold to small, privately held businesses with fewer than 20 employees and several million dollars in gross revenues. What distinguished a legitimate plan from the plans at issue were the life insurance policies used to fund them. The employer would make large cash contributions in the form of insurance premiums, deducting the entire amounts. The insurance policy was designed to have a "springing cash value," meaning that for the first 5-7 years it would have a near-zero cash value, and then spring up in value.
The rest of the article or try www.taxaudit419.com for help and good luck.
ReplyDeletee scrutiny to unwitting customers."
A defense attorney, who represents benefits professionals in pending lawsuits, said the main defense is that the plans complied with the regulations at the time and that "nobody can predict the future."
An employee benefits attorney who has settled several cases against insurance companies, said that although the lost tax benefit is not recoverable, other damages include the hefty commissions - which in one of his cases amounted to $860,000 the first year - as well as the costs of handling the audit and filing amended tax returns.
Defying the individualized approach an attorney filed a class action in federal court against four insurance companies claiming that they were aware that since the 1980s the IRS had been calling the policies potentially abusive and that in 2002 the IRS gave lectures calling the plans not just abusive but "criminal." A judge dismissed the case against one of the insurers that sold 412(i) plans.
The court said that the plaintiffs failed to show the statements made by the insurance companies were fraudulent at the time they were made, because IRS statements prior to the revenue rulings indicated that the agency may or may not take the position that the plans were abusive. The attorney, whose suit also names law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.
In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.
Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties, but only in cases where the tax benefits were less than $100,000 per year for individuals and $200,000 for entities. That moratorium was recently extended until March 1, 2010.
But tax experts say the audits and penalties continue. "There's a bit of a disconnect between what members of Congress thought they meant by suspending collection and what is happening in practice. Clients are still getting bills and threats of liens," Wallach said.
"Thousands of business owners are being hit with million-dollar-plus fines. ... The audits are continuing and escalating. I just got four calls today," he said. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.
"From what we know, Congress is looking to make the penalties more proportionate to the tax benefit received instead of a fixed amount."
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, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR and captive insurance plans. He speaks at more than ten conventions annually, writes for more than 50 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 the AICPA best-selling books, including “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.” He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, or visit www.taxadvisorexpert.com.
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.
google lance wallach for beta plan help beta plan audits beta plan lawsuits beta plan get your money back
ReplyDeletes law firm for its opinion letters approving the plans, will appeal the dismissal to the 5th Circuit.
In a case that survived a similar motion to dismiss, a small business owner is suing Hartford Insurance to recover a "seven-figure" sum in penalties and fees paid to the IRS. A trial is expected in August.
Last July, in response to a letter from members of Congress, the IRS put a moratorium on collection of §6707A penalties, but only in cases where the tax benefits were less than $100,000 per year for individuals and $200,000 for entities. That moratorium was recently extended until March 1, 2010.
But tax experts say the audits and penalties continue. "There's a bit of a disconnect between what members of Congress thought they meant by suspending collection and what is happening in practice. Clients are still getting bills and threats of liens," Wallach said.
"Thousands of business owners are being hit with million-dollar-plus fines. ... The audits are continuing and escalating. I just got four calls today," he said. A bill has been introduced in Congress to make the penalties less draconian, but nobody is expecting a magic bullet.
"From what we know, Congress is looking to make the penalties more proportionate to the tax benefit received instead of a fixed amount."
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, abusive tax shelters, financial, international tax, and estate planning. He writes about 412(i), 419, Section79, FBAR and captive insurance plans. He speaks at more than ten conventions annually, writes for more than 50 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 the AICPA best-selling books, including “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots.” He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, or visit www.taxadvisorexpert.com.
Lance Wallach has never lost a case. Fight IRS and win a lawsuit against any 419 plan like the Beta plan, Benistar, grist mill sadi nova trust that IRS raided, sea nine veba, niche etc.
ReplyDeleteBeta plan help try www.vebaplan.com or google lance wallach for Beta plan help. Get your money. ance Wallach, Managing Director, is the
ReplyDeletenation's leading expert on employee benefit plans,
tax problem resolution and IRS audit defense.
Mr. Wallach is a member of the AICPA faculty of
teaching professionals & a renowned national
expert in many court cases. He is the author of
many best selling financial & law books, including:
* "Wealth Preservation Planning" by the
National Society of Accountants
* "The CPA's Guide to Federal & Estate
Gift Taxation" published by Bisk
* The AICPA's "The team approach to Tax,
Financial & Estate planning."
* "The CPA's Guide to Life Insurance" by
Bisk CPEasy
* Avoiding Circular 230 Malpractice Traps
and Common Abusive Small Businesss Hot
spots by the AICPA, author/moderator
Lance Wallach
Beta plan help with Lance Wallach. Google him and anyone else. Who do you trust?
ReplyDeleteBeta Plans Abusive Tax Shelters
Tuesday, January 21, 2014
BETA Plan Strategy
Starting in 2001, and continuing through 2007, Plaintiffs made annual contributions of $40,000 to the BETA Plan and, "as advised by Rau and Defendants Moritt ... and Designs," claimed the same amount as annual tax deductions. (Id. ¶¶ 4041.) In 2003, the IRS issued stricter regulations on multiple-employer benefit plans under Section 419A(f)(6) of the IRC. (Id. ¶ 34.) In response to those regulations, Designs signed a BETA Plan Severance Agreement, effective January 1, 2003, that effectively transformed the BETA Plan from one multiple-employer plan ("MEP") into several single-employer plans ("SEP"). (Id. ¶¶ 34, 43.) This change in plan structure resulted in a split-dollar life insurance arrangement for plan participants, pursuant to which plan benefits would be separated between employers and shareholder-employees. (Id. ¶ 34.)
Lance Wallach spoke and emailed insurance companies in 2002 warning of IRS audits and lawsuits on 419 plans like Beta but all Hartford insurance and others did was try to sell more abusive tax shelter 419 plans as they became known as.
ReplyDeleteWhat are you waiting for. If you were in the Beta plan 419 or any other abusive tax shelter you needed to file 8886 properly, most did not. You need help. Google Lance Wallach on the Beta plan or any other abusive tax shelter like Benistar, grist mill trust nova trust sadi trust sea nine veba etc.
ReplyDeleteBlog Archive
▼ 2014 (4)
▼ January (4)
How to Avoid IRS Fines for You and Your Clients
BETA Plan Strategy
BETA Plan
Specializing in IRS Audit Defense
Help with Common IRS Problems: Beta Plans Abusive Tax Shelters ...
ReplyDeleteirstaxprobs.blogspot.com/2014/.../beta-plans-abusive-tax-shelters-beta.ht...
by Lance Wallach - in 45 Google+ circlesnce WallachFebruary 7, 2014 at 5:30 AM
What are you waiting for. If you were in the Beta plan 419 or any other abusive tax shelter you needed to file 8886 properly, most did not. You need help. Google Lance Wallach on the Beta plan or any other abusive tax shelter like Benistar, grist mill trust nova trust sadi trust sea nine veba etc.
Blog Archive
▼ 2014 (4)
▼ January (4)
How to Avoid IRS Fines for You and Your Clients
BETA Plan Strategy
BETA Plan
Specializing in IRS Audit Defense
23 hours ago - Jan 21, 2014 - sea nine veba 419 help beta plan 419 IRS audits lawsuits. RS to Audit Sea Nine VEBA Participating Employers: Abusive Tax ...
nce WallachFebruary 7, 2014 at 5:30 AM
ReplyDeleteWhat are you waiting for. If you were in the Beta plan 419 or any other abusive tax shelter you needed to file 8886 properly, most did not. You need help. Google Lance Wallach on the Beta plan or any other abusive tax shelter like Benistar, grist mill trust nova trust sadi trust sea nine veba etc.
Blog Archive
▼ 2014 (4)
▼ January (4)
How to Avoid IRS Fines for You and Your Clients
BETA Plan Strategy
BETA PlanBeta plan help with Lance Wallach. Google him and anyone else. Who do you trust?
Beta Plans Abusive Tax Shelters
Tuesday, January 21, 2014
BETA Plan Strategy
Starting in 2001, and continuing through 2007, Plaintiffs made annual contributions of $40,000 to the BETA Plan and, "as advised by Rau and Defendants Moritt ... and Designs," claimed the same amount as annual tax deductions. (Id. ¶¶ 4041.) In 2003, the IRS issued stricter regulations on multiple-employer benefit plans under Section 419A(f)(6) of the IRC. (Id. ¶ 34.) In response to those regulations, Designs signed a BETA Plan Severance Agreement, effective January 1, 2003, that effectively transformed the BETA Plan from one multiple-employer plan ("MEP") into several single-employer plans ("SEP"). (Id. ¶¶ 34, 43.) This change in plan structure resulted in a split-dollar life insurance arrangement for plan participants, pursuant to which plan benefits would be separated between employers and shareholder-employees. (Id. ¶ 34.)
ReplyDelete
Specializing in IRS Audit Defense
Lance Wallach
ReplyDeleteShared publicly - Feb 7, 2014
#Insurance
Transition, and Estate Planning. ... 24: Permanent Benefit Section 79 Plan.
6707A Penalties & 419 Plans Litigation
vebaplan.blogspot.com/
by Lance Wallach - in 48 Google+ circles
Nov 23, 2013 - And according to Kevin Lee, Pacific LIfe gave a green light on every aspect ... Some strategies, such as IRS section 419 and 412(i) plans, used life ... 419, captive insurance, or Section 79 plan, then you may be in big trouble.
You've visited this page 3 times. Last visit: 1/27/14
Material Advisors & 419 Plans Litigation
419 412i audits lawsuits www.taxaudit419.com for help
ReplyDeleteLance Wallach
director at taxaudit419.com
people that sold or had something to do with the plans
Plan names:
Benistar, SADI Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust
Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
"Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage"
Names of People who SOLD:
"Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder
Insurance Companies -- need to be 412 AND 419:
Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
Had tax problems Lance Wallach fixed
ReplyDeleteThe 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.
Kenny Hartstein Dennis Cunning Steve Toth
Larry Bell Scott Ridge Randall Smith
Greg Roper Tracy Sunderlage Joseph Donnelly
Norm Bevan Michael Sonnenberg Judy Carsrud
Dan Carpenter Michael Carroll Anthony Fakouri
Steve Burgess Tom Crosswhite
Then You Should Know:
ReplyDeleteThe 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.
Kenny Hartstein Dennis Cunning Steve Toth
Larry Bell Scott Ridge Randall Smith
Greg Roper Tracy Sunderlage Joseph Donnelly
Norm Bevan Michael Sonnenberg Judy Carsrud
Dan Carpenter Michael Carroll Anthony Fakouri
Steve Burgess Tom Crosswhite
Then You Should Know: