412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS
412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS
The Truth About Section 79 Permanent Insurance Plans
ReplyDeleteSection 79 plans are a part of the employee benefit section of the Internal Revenue Service code (IRC). This code (IRC code Section 1.79) has been a part of the IRC since it was initially adopted in 1953. The President of the United States at that time was Dwight D. Eisenhower.
Section 79 permanent insurance plans are sold within the United States by large national life insurance companies, all of whom have internal legal and compliance departments whose role is to ensure that the products sold by those companies are legal and comply with the rules and spirit of the law. Section 79 permanent insurance plans are sold legally in all 50 states of these United States of America. For the protection of consumers, each state has an insurance department that reviews and approves all company and agent licensing and products sold within that state. (see National Association of Insurance Commissioners at this link).
So, here’s the truth about Section 79 Permanent Insurance Plans:
• This is a legal insurance product, covered in the IRS Code number 1.79.
• All group life insurance is covered under this IRS Code. Most governmental agencies, non-profit organizations and large Fortune 1,000 companies have section 79 as an employee benefit.
• This is not a new code. The IRC 1.79 has been in the code since 1953.
• All Section 79 products are fully vetted by major national insurance companies, their lawyers and compliance staffs, for sale in all 50 states. These are companies with long and successful histories of selling insurance products in the United States since the mid-1800’s.
• Every state insurance department has fully vetted these Section 79 products and approved them for sales in their states. These products are legal for sale in all 50 states.
• Section 79 plans are not “listed transactions.” Here is a list of all listed transactions according to the IRS – http://www.irs.gov/Businesses/Corporations/Listed-Transactions---LB&I-Tier-I-Issues
No need to be fearful due to the innuendo of an internet spammer; for REAL information about Section 79 plans, contact Business Planning Group at (888)545-2205 or visit our website at BusinessPlanningGroup.com/truth .
I.R.S. IS LOOKING INTO CAPTIVE INSURANCE SHELTERS
ReplyDeleteAPRIL 13, 2015 ADMIN
nytimes.com
It’s tax time again, which means many people will be writing checks to the Internal Revenue Service. But not a lawyer in Los Angeles, who last year put all of his earnings, $840,000, into a tax shelter and plans to put $1 million in this year. He doesn’t have to pay any income tax.
In fact, he was able to borrow back some of the money to live on and write off the interest on the loan.
The attorney accomplished this feat by putting his earnings into a captive insurance company, a vehicle that allows companies to insure themselves against risks that are too expensive to buy coverage for in the regular insurance market or to cover events that are unlikely to happen but would be costly if they actually did.
Until a decade or so ago, most captives, as they are known, were set up by large companies.
I.R.S. Is Looking Into Captive Insurance Shelters – NYTimes.com
But captives have gained in popularity among small-business owners who see another benefit: They can be designed so that the risks they insure are so unlikely that the captives will never pay out a claim and all those premiums will go back to the business owners or their heirs with little or no tax.
I.R.S. Is Looking Into Captive Insurance Shelters – NYTimes.com
Stephen M. Moskowitz, a tax lawyer and certified public accountant in San Francisco who advised the California lawyer, said he also worked with a dentist who set up a captive to insure against a terrorist attack in his dental office.
He said in an interview that he was confident he was following the letter of the law. “All these Fortune 500s that make billions in profits and don’t pay any income taxes? How do they do that? They follow the rules,” he said. “My personal opinion is these rules were put in to benefit the big boys, and the medium boys got a hold of them.”
The question is whether these small captives have gone too far. This year, the Internal Revenue Service placed them on its annual “Dirty Dozen list of tax scams.” Small captives now share space with phishing, identity theft and offshore tax avoidance.
In its commentary, the I.R.S. criticized wealthy individuals who canceled or greatly reduced their income by putting money into small captives. The agency took particular exception to promoters who drafted policies “to cover ordinary business risks or esoteric, implausible risks for exorbitant ‘premiums,’ while maintaining their economical commercial coverage with traditional insurers.”
Yet promoters of captives persist, seemingly undaunted.
I.R.S. IS LOOKING INTO CAPTIVE INSURANCE SHELTERS
ReplyDeleteAPRIL 13, 2015 ADMIN
nytimes.com
It’s tax time again, which means many people will be writing checks to the Internal Revenue Service. But not a lawyer in Los Angeles, who last year put all of his earnings, $840,000, into a tax shelter and plans to put $1 million in this year. He doesn’t have to pay any income tax.
In fact, he was able to borrow back some of the money to live on and write off the interest on the loan.
The attorney accomplished this feat by putting his earnings into a captive insurance company, a vehicle that allows companies to insure themselves against risks that are too expensive to buy coverage for in the regular insurance market or to cover events that are unlikely to happen but would be costly if they actually did.
Until a decade or so ago, most captives, as they are known, were set up by large companies.
I.R.S. Is Looking Into Captive Insurance Shelters – NYTimes.com
But captives have gained in popularity among small-business owners who see another benefit: They can be designed so that the risks they insure are so unlikely that the captives will never pay out a claim and all those premiums will go back to the business owners or their heirs with little or no tax.
I.R.S. Is Looking Into Captive Insurance Shelters – NYTimes.com
Stephen M. Moskowitz, a tax lawyer and certified public accountant in San Francisco who advised the California lawyer, said he also worked with a dentist who set up a captive to insure against a terrorist attack in his dental office.
He said in an interview that he was confident he was following the letter of the law. “All these Fortune 500s that make billions in profits and don’t pay any income taxes? How do they do that? They follow the rules,” he said. “My personal opinion is these rules were put in to benefit the big boys, and the medium boys got a hold of them.”
The question is whether these small captives have gone too far. This year, the Internal Revenue Service placed them on its annual “Dirty Dozen list of tax scams.” Small captives now share space with phishing, identity theft and offshore tax avoidance.
In its commentary, the I.R.S. criticized wealthy individuals who canceled or greatly reduced their income by putting money into small captives. The agency took particular exception to promoters who drafted policies “to cover ordinary business risks or esoteric, implausible risks for exorbitant ‘premiums,’ while maintaining their economical commercial coverage with traditional insurers.”
Yet promoters of captives persist, seemingly undaunted.