Reportable Transactions .com

Reportable Transactions .com


  1. Lance WallachJuly 27, 2014 at 3:49 PM
    Question. Do you represent taxpayers who have participated in different welfare benefit plans?

    Answer. Yes. We have knowledge of many different welfare benefit plans and experience in representing taxpayers who participate in those plans before the IRS. A sampling of the plans that we know well include:

    Millennium Plan
    Insured Security Plan
    Corporate Benefit Services Plan
    Sea Nine Associates VEBA
    Niche National Benefit Plans
    Professional Benefit Trust (PBT)
    Koresko STEP Plan
    Bisys Plan
    Xelan Plan
    Sterling Plan

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    Illegal 412(i) Plans
    Started by FLMaster , Mar 10 2006 01:43 PM

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    46 replies to this topic
    #1 Illegal 412(i) Plans: post #1 FLMaster
    Registered User

    57 posts
    Posted 10 March 2006 - 01:43 PM
    I suggest that the discussion of tax opinion letters, marketing materials, and plan designs, be moved to this thread as it has nothing to do with case studies of traditional 412(i) plans.
    For those who do not know the "bloody history" of illegal 412(i), it started when promoters of 419(a)(f)(6) plans were under attack by the IRS. They had traditionally used a surpressed cash value product to remove assets from their plans. Needing to find another code section,(which was not tainted) the Insurance Gurus discovered 412(i). They took this to several law firms who issued opinions that they were not "springing cash value" products as techincally defined. Next, they wrapped the policy with marketing materials that stated you could purchase 100% life insurance, put $500,000 into the plan and deduct it and then buy the policy out at $87,000. The policy would grow quickly to $500,000 which you could withdraw tax free. Hence, tax deductible insurance going in-tax free coming out. Only creative insurance minds would of thought of this not the green eye-shaded actuaries- While the actuaries on this board were answering hypertechincal questions, the insurance industry sold (by some estimates) $250 million of premium into these plans. In 5 years over one billion will be collected. The insurance gurus claim the actuaries just are not creative, the actuaries stated foul play and we await the IRS (and plaintiffs attorneys maybe if the IRS is sucessful). Who will end up on the short end of this? Probably the taxpayer who purchased the scam/plan. If you look at it from the taxpayers viewpoint-Major Brokerage firm sold it-respected large law firm wrote opinion-large insurnce company issued the product-and major actuairal firm administered it-How could they know it was a scam? Do the insurance companies have any liability? What about the law firms? Will the taxpayers have any money left to fight after the IRS is done with them?
    #2 Illegal 412(i) Plans: post #2 FLMaster
    Registered User

    57 posts
    Posted 13 March 2006 - 01:10 AM
    Please post comments on the tax opinions here. :shades:
    #3 Illegal 412(i) Plans: post #3 vebaguru
    Registered User