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| Telephone: 516-938-5007 |
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| Lawyer 4 Audits .com The Law Offices of Ira Kaplan |
California Enrolled Agent
January 2, 2009
How to Get Fined $100,000 by the IRS and Lose Your License
By Lance Wallach, CLU, ChFC and Ira Kaplan, Esq., CPA, MBA
Over the past decade, business owners have been overwhelmed by a
plethora of arrangements designed to reduce the cost of providing
employee benefits and taxes, while simultaneously increasing their
own retirement savings. The solutions ranged from traditional pension
and profit sharing plans to more advanced strategies.
Some strategies, such as IRS Section 419 and 412(i) plans, used life
insurance as vehicles to bring about benefits. Unfortunately, the high
life insurance commissions (often 90% of the contribution, or more)
fostered an environment that led to the marketing and selling of
aggressive and noncompliant plans. Read More
January 2, 2009
How to Get Fined $100,000 by the IRS and Lose Your License
By Lance Wallach, CLU, ChFC and Ira Kaplan, Esq., CPA, MBA
Over the past decade, business owners have been overwhelmed by a
plethora of arrangements designed to reduce the cost of providing
employee benefits and taxes, while simultaneously increasing their
own retirement savings. The solutions ranged from traditional pension
and profit sharing plans to more advanced strategies.
Some strategies, such as IRS Section 419 and 412(i) plans, used life
insurance as vehicles to bring about benefits. Unfortunately, the high
life insurance commissions (often 90% of the contribution, or more)
fostered an environment that led to the marketing and selling of
aggressive and noncompliant plans. Read More
New and Bestselling
AICPA CPE Self-Study Courses
Best Sellers – March 2008
Avoiding Circular 230 Malpractice Traps and
Common Abusive Small Business Hot Spots,
by Sid Kess
Author/Moderator: Lance Wallach, CLU, CHFC,
CIMC
Publisher: AICPA
This course will enable the practitioner to better
understand many of the abusive insurance and
annuity-based products being marketed to your
clients and how you can alleviate exposure to IRS
scrutiny. Read More
AICPA CPE Self-Study Courses
Best Sellers – March 2008
Avoiding Circular 230 Malpractice Traps and
Common Abusive Small Business Hot Spots,
by Sid Kess
Author/Moderator: Lance Wallach, CLU, CHFC,
CIMC
Publisher: AICPA
This course will enable the practitioner to better
understand many of the abusive insurance and
annuity-based products being marketed to your
clients and how you can alleviate exposure to IRS
scrutiny. Read More
National Society of Accountants
Captive Insurance and Other Tax Reduction
Strategies – The Good, Bad, and Ugly
By Lance Wallach May 14, 2008
Every accountant knows that increased cash flow
and cost savings are critical for businesses in 2008.
What is uncertain is the best path to recommend to
garner these benefits.
Over the past decade business owners have been
overwhelmed by a plethora of choices designed to
reduce the cost of providing employee benefits
while increasing their own retirement savings. The
solutions ranged from traditional pension and profit
sharing plans to more advanced strategies.
Some strategies, such as IRS section 419 and 412
(i) plans, used life insurance as vehicles to bring
about benefits. Unfortunately, the high life
insurance commissions (often 90% of the
contribution, or more) fostered an environment that
led to aggressive and noncompliant plans.
Read More
Captive Insurance and Other Tax Reduction
Strategies – The Good, Bad, and Ugly
By Lance Wallach May 14, 2008
Every accountant knows that increased cash flow
and cost savings are critical for businesses in 2008.
What is uncertain is the best path to recommend to
garner these benefits.
Over the past decade business owners have been
overwhelmed by a plethora of choices designed to
reduce the cost of providing employee benefits
while increasing their own retirement savings. The
solutions ranged from traditional pension and profit
sharing plans to more advanced strategies.
Some strategies, such as IRS section 419 and 412
(i) plans, used life insurance as vehicles to bring
about benefits. Unfortunately, the high life
insurance commissions (often 90% of the
contribution, or more) fostered an environment that
led to aggressive and noncompliant plans.
Read More
How to Find the Right Experts to Guide You Through These
Times
Commercial Flooring Report
November 2008
These days, business owners have a lot on their plates. Not only do
they have businesses to run, but they need to have the resources to
operate, manage, and flourish those businesses in order to stay afloat.
Without serious knowledge of things like finances, taxes, tax audits, and
retirement plans, it's hard to keep a shop open for business and to
ensure that your future is in good hands. Especially now, as the
economy begins to change, it is smart to look into different ways to
secure your future and money. Recent well documented events have
made it increasingly important to educate yourself on how to handle
such endeavors correctly. Thousands of businesses have closed as a
result of bankruptcy, corrupt policies, lowered sales, and other factors,
often because issues that seemingly, in hindsight, should have been
obvious were overlooked. In this environment, more than ever, you
simply cannot afford mistakes or omissions with respect to your
finances. Such mistakes can result in audits and other problems that
could eventually lead to the closing of your establishment. Being aware
of the amount of debt that you are carrying, when your sales tend to
plummet, and your number of employees are three trivial yet important
aspects of watching your money. Websites such as IRS.gov,
FinanceExperts.org, and TaxLibrary.us are resources that can help
make sure that there are ZERO unpleasant surprises in your numbers.
Additionally, keeping accurate records and constantly double checking
your numbers are two obvious, yet often neglected, things that you
should do. So the question stands: how knowledgeable are you about
your own finances? Read More
Times
Commercial Flooring Report
November 2008
These days, business owners have a lot on their plates. Not only do
they have businesses to run, but they need to have the resources to
operate, manage, and flourish those businesses in order to stay afloat.
Without serious knowledge of things like finances, taxes, tax audits, and
retirement plans, it's hard to keep a shop open for business and to
ensure that your future is in good hands. Especially now, as the
economy begins to change, it is smart to look into different ways to
secure your future and money. Recent well documented events have
made it increasingly important to educate yourself on how to handle
such endeavors correctly. Thousands of businesses have closed as a
result of bankruptcy, corrupt policies, lowered sales, and other factors,
often because issues that seemingly, in hindsight, should have been
obvious were overlooked. In this environment, more than ever, you
simply cannot afford mistakes or omissions with respect to your
finances. Such mistakes can result in audits and other problems that
could eventually lead to the closing of your establishment. Being aware
of the amount of debt that you are carrying, when your sales tend to
plummet, and your number of employees are three trivial yet important
aspects of watching your money. Websites such as IRS.gov,
FinanceExperts.org, and TaxLibrary.us are resources that can help
make sure that there are ZERO unpleasant surprises in your numbers.
Additionally, keeping accurate records and constantly double checking
your numbers are two obvious, yet often neglected, things that you
should do. So the question stands: how knowledgeable are you about
your own finances? Read More
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Journal of Accountancy
September 2008
Abusive Insurance and Retirement Plans
Single-employer section 419 welfare benefit plans are the
latest incarnation in insurance deductions the IRS deems
abusive.
by Lance Wallach
Parts of this article are from the AICPA CPE self-study course Avoiding
Circular 230 Malpractice Traps and Common Abusive Small Business Hot
Spots, by Sid Kess, authored by Lance Wallach.
Many of the listed transactions that can get your clients into trouble
with the IRS are exotic shelters that relatively few practitioners ever
encounter. When was the last time you saw someone file a return
as a Guamanian trust (Notice 2000-61)? On the other hand, a few
listed transactions concern relatively common employee benefit
plans the IRS has deemed tax-avoidance schemes or otherwise
abusive. Perhaps some of the most likely to crop up, especially in
small business returns, are arrangements purporting to allow
deductibility of premiums paid for life insurance under a welfare
benefit plan. Read More
California Enrolled Agent
January 2, 2009
Abusive 412(i) Retirement Plans Can Get
Accountants Fined $200,000
By Lance Wallach & Ira Kaplan, Esq.
Most insurance agents sell 412(i) retirement
plans. The large insurance commissions
generate some of the enthusiasm. Unlike
other retirement plans, the 412(i) plan must
have insurance products as the funding
mechanism. This seems to generate
enthusiasm among insurance agents. The
IRS has been auditing almost all participants
in 412(i) plans for the last few years. At first,
they thought all 412(i) plans were abusive.
Many participants’ contributions were
disallowed and there were additional fines of
$200,000 per year for the participants. The
accountants who signed the tax returns (who
the IRS called “material advisors”) were also
fined $200,000 with a referral to the Office of
Professional Responsibility. Read more
.
TAX BRIEFS
ABUSIVE INSURANCE PLANS GET
RED FLAG
The IRS in Notice 2007-83 identified as listed transactions
certain trust arrangements involving cash-value life
insurance policies. Read More
ABUSIVE INSURANCE PLANS GET
RED FLAG
The IRS in Notice 2007-83 identified as listed transactions
certain trust arrangements involving cash-value life
insurance policies. Read More
NEW JERSEY ASSOCIATION OF
PUBLIC ACCOUNTANTS
Lines from Lance - Newsletter November 2009
01/5/10: UPDATE! BREAKING NEWS:
______________________________________________________
The moratorium on collection has been extended for two additional
months until March 1st.
Following is the text of the letter posted on 6707A BLOG:
http://6707a.wordpress.com/2009/12/24/shulman-promises-grassley-
extension-of-moratorium-on-penalty-collections/
______________________________________________________
Business Owners, Accountants, and
Others Fined $200,000 by IRS and
Don’t Know Why
By Lance Wallach
If you are a small business owner, accountant or insurance
professional you may be in big trouble and not know it. IRS has
been fining people like you $200,000. Most people that have
received the fines were not aware that they had done anything
wrong. What is even worse is that the fines are not appeal-able.
This is not an isolated situation. This has been happening to a lot of
people.
Currently, the Internal Revenue Service (“IRS”) has the discretion to
assess hundreds of thousands of dollars in penalties under §6707A
of the Internal Revenue Code (“Code”) in an attempt to curb tax
avoidance shelters. This discretion can be applied regardless of the
innocence of the taxpayer and was granted by Congress. It works so
that if the IRS determines you have engaged in a listed transaction
and failed to properly disclose it, you will be subject to a potentially
draconian penalty regardless of any other facts and circumstances
concerning the transaction. For some, this penalty has been
assessed at almost a million dollars and for many it is the beginning
of a long nightmare.
READ MORE
PUBLIC ACCOUNTANTS
Lines from Lance - Newsletter November 2009
01/5/10: UPDATE! BREAKING NEWS:
______________________________________________________
The moratorium on collection has been extended for two additional
months until March 1st.
Following is the text of the letter posted on 6707A BLOG:
http://6707a.wordpress.com/2009/12/24/shulman-promises-grassley-
extension-of-moratorium-on-penalty-collections/
______________________________________________________
Business Owners, Accountants, and
Others Fined $200,000 by IRS and
Don’t Know Why
By Lance Wallach
If you are a small business owner, accountant or insurance
professional you may be in big trouble and not know it. IRS has
been fining people like you $200,000. Most people that have
received the fines were not aware that they had done anything
wrong. What is even worse is that the fines are not appeal-able.
This is not an isolated situation. This has been happening to a lot of
people.
Currently, the Internal Revenue Service (“IRS”) has the discretion to
assess hundreds of thousands of dollars in penalties under §6707A
of the Internal Revenue Code (“Code”) in an attempt to curb tax
avoidance shelters. This discretion can be applied regardless of the
innocence of the taxpayer and was granted by Congress. It works so
that if the IRS determines you have engaged in a listed transaction
and failed to properly disclose it, you will be subject to a potentially
draconian penalty regardless of any other facts and circumstances
concerning the transaction. For some, this penalty has been
assessed at almost a million dollars and for many it is the beginning
of a long nightmare.
READ MORE