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Section 79 Plans Why You Shouldn't Use Them Get the Facts
What is a Section 79 Plan? It depends on who you ask. If you ask an insurance company that offers these plans or an insurance agent that sells them, they will tell you that they are one of the last “tax-favorable” wealth building tools a business owner can use to grow their wealth.
If you ask me what a Section 79 Plan is, I’ll tell you that it’s one of the most over-sold and over-abused life insurance sales gimmicks in the insurance industry. Business owners can grow more wealth NOT using these plans (something you’ll never hear from an insurance agent pitching them).
Who is the ideal client for an insurance agent to pitch this plan to? A profitable small business who has an owner that would like an additional “tax-deductible” wealth building tool to use for retirement (so the market is large).
The sales pitch—Business owner, how you like to fund a plan that…
…allows your money to grows tax-free and where the money can be removed tax free in retirement (unlike a qualified plan where the money coming out is fully taxable)?
…is 30-40% deductible through your business?
…has limited expenses for employees?
Sound great right? Sure, if you don’t know the “real” math and pitfall to these plans.
That’s why I created this site. I wanted consumers and advisors alike learn in a “full-disclosure” manner the problems with Section 79 Plans.
After you learn about the problems with Section 79 Plans, I think, like me, you’ll come to the conclusion that the best course of action is to avoid these plans altogether.
Why You Should Stay Away From Section 79 Life Insurance Plans!
I created a more detailed two part series on why you should stay away from Section 79 plans.
To read Part I of my series on why you shouldn’t use Section 79 Plans, click here.
To read Part II of my series on why you shouldn’t use Section 79 Plans, click here.
While I strongly recommend you read my more detailed summaries, the following are the main bullet points explaining why you should stay away from these plans:
1) You have to lie to employees to implement them.
2) The life illustrations given by ignorant or crooked insurance agents are not realistic (most use today’s historically low lending rates with 2-3% loan spreads on variable loans on EIUL policies (ones that do not have a fixed lending rate)).
3) You have to be a C-Corporation to use them.
4) The life policies sold in these plans are so bad that the companies don’t want them sold unless they are in Section 79 plans (the policies are designed to have poor performance so the income tax deduction is increased).
Contact Information Email : LanWalla@aol.com Phone : 516-938-5007 Address : Lance Wallach Www.TaxAudit419.com www.Vebaplan.org By Lance Wallach, California Broker Mag The IRS has been attacking all 419 welfare benefit plans, many 412i retirement plans, captive insurance plans with life insurance in them, and Section 79 plans. The IRS is aggressively auditing various plans and calling them 'listed transactions' 'abusive tax shelters,' or 'reportable transactions,'participation in any of which must be disclosed to the Service. The result has been IRS audits, disallowances, and huge fines for not properly reporting under IRC 6707A. In a recent tax court case, Curico v. Commissioner (TC Memo 2010-115), the Tax Court ruled that an investment in an employee welfare benefit plan marketed under the name 'Benistar' was a listed transaction. Taxpayers and their representatives should be aware that the Service has disallowed deductions for contributions to these arrangements. The IRS is cracking down on small business owners who participate in tax reduction insurance plans and the brokers who sold them. For help with these issues visit www.taxaudit419.com
How to Avoid IRS Fines for You and Your Clients OCT 26, 2010 | BY LANCE WALL to a settlement with the IRS, a 412(i) plan was converted into a traditional defined benefit plan. All of the contributions to the 412(i) plan would have been allowable if they had initially adopted a traditional defined benefit plan. Based on negotiations with the IRS agent, the audit of the plan resulted in no income and minimal excise taxes due.
Toward the end of the audit, the business owner received a notice from the IRS. The IRS had assessed a $400,000 penalty for the client under Section 6707A, because the client allegedly participated in a listed transaction and failed to file Form 8886 in a timely manner.
The IRS may call you a material advisor for selling one of these plans and fine you $200,000.00. The IRS may fine your clients over a million dollars for being in a retirement plan, 419 plan, etc. Anything that the Service deems, at its sole discretion, a "listed transaction" is fair game. As you read this article, hundreds of unfortunate people are having their lives ruined by these fines. You may need to take action immediately.
Lance Wallach speaks and writes about benefit plans, tax reductions strategies, and financial plans. He can be reached at 516
+1 516.938.5007lance@expertwitness.taxNationwide - U.S.A Restricted Property Trusts Protect Yourself From IRS Audits HOME FILE FORM 8886 TODAY CONTACT US Welcome To Our Website for professionals and business entities who must comply with new IRS Notice requirements.
Failing to File Form 8886 for Vebas like Sea Nine Veba, or any 419, section 79, small Captives, or Restricted Property Trusts, creates multiple penalties!
The Form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit program or 419 Plan.
If you are considering any of theses plans you need to take a few steps to protect yourself from potential audits from the IRS.
If you do not believe this Google Lance Wallach and whoever is advising you: YOU decide whom YOU Trust! Lance Wallach, National Society of Accountants, Speaker of the Year 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, Section 79, RPT, FBAR and Captive insurance plans.
Get Help Filing Form 8886 _ We make Filing This Form Painless!!! Get all Your Money Back From the IRS_ Protect Yourse
I truly acknowledge and keep writing.This is an incredible rousing post. I am basically satisfied with your great work. You put truly exceptionally supportive data. I am hoping to perusing your next post.
ReplyDeleteinventory control accounting software
ReplyDeleteSection 79 Plans
Why You Shouldn't Use Them
Get the Facts
What is a Section 79 Plan? It depends on who you ask.
If you ask an insurance company that offers these plans or an insurance agent that sells them, they will tell you that they are one of the last “tax-favorable” wealth building tools a business owner can use to grow their wealth.
If you ask me what a Section 79 Plan is, I’ll tell you that it’s one of the most over-sold and over-abused life insurance sales gimmicks in the insurance industry. Business owners can grow more wealth NOT using these plans (something you’ll never hear from an insurance agent pitching them).
Who is the ideal client for an insurance agent to pitch this plan to? A profitable small business who has an owner that would like an additional “tax-deductible” wealth building tool to use for retirement (so the market is large).
The sales pitch—Business owner, how you like to fund a plan that…
…allows your money to grows tax-free and where the money can be removed tax free in retirement (unlike a qualified plan where the money coming out is fully taxable)?
…is 30-40% deductible through your business?
…has limited expenses for employees?
Sound great right? Sure, if you don’t know the “real” math and pitfall to these plans.
That’s why I created this site. I wanted consumers and advisors alike learn in a “full-disclosure” manner the problems with Section 79 Plans.
After you learn about the problems with Section 79 Plans, I think, like me, you’ll come to the conclusion that the best course of action is to avoid these plans altogether.
Why You Should Stay Away From Section 79 Life Insurance Plans!
I created a more detailed two part series on why you should stay away from Section 79 plans.
To read Part I of my series on why you shouldn’t use Section 79 Plans, click here.
To read Part II of my series on why you shouldn’t use Section 79 Plans, click here.
While I strongly recommend you read my more detailed summaries, the following are the main bullet points explaining why you should stay away from these plans:
1) You have to lie to employees to implement them.
2) The life illustrations given by ignorant or crooked insurance agents are not realistic (most use today’s historically low lending rates with 2-3% loan spreads on variable loans on EIUL policies (ones that do not have a fixed lending rate)).
3) You have to be a C-Corporation to use them.
4) The life policies sold in these plans are so bad that the companies don’t want them sold unless they are in Section 79 plans (the policies are designed to have poor performance so the income tax deduction is increased).
Section 79 Scams and Captive Insurance History
ReplyDeleteWhen trying to understand how a product becomes a priate professional for any such advice.
ReplyDeleteContact Information
Email :
LanWalla@aol.com
Phone :
516-938-5007
Address :
Lance Wallach
Www.TaxAudit419.com
www.Vebaplan.org
By Lance Wallach, California Broker Mag
The IRS has been attacking all 419 welfare benefit plans, many 412i retirement plans, captive insurance plans with life insurance in them, and Section 79 plans. The IRS is aggressively auditing various plans and calling them 'listed transactions' 'abusive tax shelters,' or 'reportable transactions,'participation in any of which must be disclosed to the Service. The result has been IRS audits, disallowances, and huge fines for not properly reporting under IRC 6707A.
In a recent tax court case, Curico v. Commissioner (TC Memo 2010-115), the Tax Court ruled that an investment in an employee welfare benefit plan marketed under the name 'Benistar' was a listed transaction. Taxpayers and their representatives should be aware that the Service has disallowed deductions for contributions to these arrangements. The IRS is cracking down on small business owners who participate in tax reduction insurance plans and the brokers who sold them.
For help with these issues visit www.taxaudit419.com
FILED UNDER:MARKETS, SENIOR MARKET
ReplyDeleteHow to Avoid IRS Fines for You and Your Clients
OCT 26, 2010 | BY LANCE WALL to a settlement with the IRS, a 412(i) plan was converted into a traditional defined benefit plan. All of the contributions to the 412(i) plan would have been allowable if they had initially adopted a traditional defined benefit plan. Based on negotiations with the IRS agent, the audit of the plan resulted in no income and minimal excise taxes due.
Toward the end of the audit, the business owner received a notice from the IRS. The IRS had assessed a $400,000 penalty for the client under Section 6707A, because the client allegedly participated in a listed transaction and failed to file Form 8886 in a timely manner.
The IRS may call you a material advisor for selling one of these plans and fine you $200,000.00. The IRS may fine your clients over a million dollars for being in a retirement plan, 419 plan, etc. Anything that the Service deems, at its sole discretion, a "listed transaction" is fair game. As you read this article, hundreds of unfortunate people are having their lives ruined by these fines. You may need to take action immediately.
Lance Wallach speaks and writes about benefit plans, tax reductions strategies, and financial plans. He can be reached at 516
+1 516.938.5007lance@expertwitness.taxNationwide - U.S.A
ReplyDeleteRestricted Property Trusts
Protect Yourself From IRS Audits
HOME FILE FORM 8886 TODAY CONTACT US
Welcome To Our Website for professionals and business entities who must comply with new IRS Notice requirements.
Failing to File Form 8886 for Vebas like Sea Nine Veba, or any 419, section 79, small Captives, or Restricted Property Trusts, creates multiple penalties!
The Form, IRS Form 8886 is required for all taxpayers who participate in a listed transaction such as a multiple employer welfare benefit program or 419 Plan.
If you are considering any of theses plans you need to take a few steps to protect yourself from potential audits from the IRS.
If you do not believe this Google Lance Wallach and whoever is advising you: YOU decide whom YOU Trust! Lance Wallach, National Society of Accountants, Speaker of the Year 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, Section 79, RPT, FBAR and Captive insurance plans.
Get Help Filing Form 8886 _ We make Filing This Form Painless!!! Get all Your Money Back From the IRS_ Protect Yourse