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
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ReplyDeleteHOME » NEWS » ARTICLES » Reduce Costs, Plan Your Estate, and More With a Captive Insurance Plan
ReplyDeleteReduce Costs, Plan Your Estate, and More With a Captive Insurance Plan
Lance Wallach
September 25, 2008 — 485 views
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National Society of Accountants Member Link July 2008 Reduce Costs, Plan Your Estate, and More with a Captive By LANCE WALLACH, CLU , ChFC, CIMC
Your clients who are business owners are likely to be approached with information concerning a relatively new financial instrument called captive insurance. The term captive insurance is generic and refers to a broad spectrum of alternative insurance structures with the purpose of providing greater benefits than traditional insurance. Specifically, captive insurance can help your business clients potentially greatly lower their insurance costs, have more control in managing their insurance, and obtain coverage that might otherwise be unavailable or unaffordable. Some forms of captive insurance allow an insured or its assign to maintain an ownership interest in the underlying insurance company. As with any successful business, an owner of a captive can work with his or her advisors to best manage their insurance company. Another potential benefit is that of business and estate planning. This author stresses that a captive should never be formed unless the primary reason is business purpose. Captives should never be marketed by advisors as "wealth management" or "estate planning" tools. In fact, improper marketing of an otherwise compliant captive can lead to the loss of the captive's tax status as an insurance company, resulting in taxation and penalties of nearly one hundred percent of premiums. Yet it is a fact that a successful captive may be useful in business and estate planning. Ownership of a captive may be facilitated by a partnership or trust which is owned, controlled, or benefits a business owners' descendants. As an example, suppose that a business owner (Senior) wants to establish a captive insurance company in order to lower his insurance costs. The insurance company could be owned by a generation skipping trust currently controlled by Senior's children. The captive's premiums must be actuarially verifiable and the coverage must be wholly justifiable. The insurance sold by the captive needs to comport with all relevant statutes from both a regulatory and an IRS standpoint. If the captive's claims are less than actuarially anticipated, it may have retained earnings or profits. Depending on the type of captive insurance company, the tax rate levied on underwriting profits can be as little as zero percent. Over time, the insurance company's profits may be distributed as capital gains, dividends, or even loans to the beneficiaries of the insurance trust. The captive could even provide a funding source for future business opportunities. The ultimate effect of a compliant and successful captive could be to transfer a portion of the pre-tax premiums from Senior's business over to Senior's children, grandchildren, etc., without income, gift, or estate tax. The bottom line for any accountant or wealth advisor is that captives should be looked at as a way to garner significant insurance cost savings with a possibility of secondary benefits. Again, the author cannot overemphasize the importance that the captive must be designed to and operate as a compliant insurance company. The company must have real losses, real exposure to third party risk, and cannot be in any way an alter ego of or a savings account for the business owner. Captives can be a tremendous tool in helping businesses lower their insurance costs. This author has s
419_412i Plan Plan Abuses
ReplyDelete412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.419 Plan, 412i Plan
Wednesday, August 13, 2014
IRS Clarifies Legality of 419(e) Plans
IRS Clarifies Legality of 419(e) Plans
Posted by Lance Wallach at 12:04 PM
Labels: 412, 412(i), 419 Plan, 419 Plans, 419 Planshelters
6 comments:
Lance WallachSeptember 29, 2014 at 11:05 AM
Copyright (C) 2014
ROBIN S. WEINGAST & ASSOCIATES,
INC., ROBIN S. WEINGAST, DESIGNS
FOR FINANCE, INC., and CAPITAL
ONE, N.A. as successor to NORTH
FORK BANK AND TRUST CO., and
POINTE BENEFIT CONSULTANTS,
LLC.,
Defendants.
DENNIS M. CAVANAUGH, U.S.D.J.
This matter comes before the Court upon motions by Defendants Robin S. Weingast
&
Associates, Inc. and Robin S. Weingast (collectively the “Weingast Defendants”)
(ECF No. 24),
Defendant Designs for Finance, Inc. (“Designs”)(ECF No. 27), Defendant
Pointe Benefit
419_412i Plan Plan Abuses
ReplyDelete412i, 419e plans litigation and IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS.419 Plan, 412i Plan
Wednesday, August 13, 2014
IRS Clarifies Legality of 419(e) Plans
IRS Clarifies Legality of 419(e) Plans
Posted by Lance Wallach at 12:04 PM
Labels: 412, 412(i), 419 Plan, 419 Plans, 419 Planshelters
6 comments:
Lance WallachSeptember 29, 2014 at 11:05 AM
Copyright (C) 2014
ROBIN S. WEINGAST & ASSOCIATES,
INC., ROBIN S. WEINGAST, DESIGNS
FOR FINANCE, INC., and CAPITAL
ONE, N.A. as successor to NORTH
FORK BANK AND TRUST CO., and
POINTE BENEFIT CONSULTANTS,
LLC.,
Defendants.
DENNIS M. CAVANAUGH, U.S.D.J.
This matter comes before the Court upon motions by Defendants Robin S. Weingast
&
Associates, Inc. and Robin S. Weingast (collectively the “Weingast Defendants”)
(ECF No. 24),
Defendant Designs for Finance, Inc. (“Designs”)(ECF No. 27), Defendant
Pointe Benefit
HOME » NEWS » ARTICLES » Reduce Costs, Plan Your Estate, and More With a Captive Insurance Plan
ReplyDeleteReduce Costs, Plan Your Estate, and More With a Captive Insurance Plan
Lance Wallach
September 25, 2008 — 485 views
Share:
Share this on LinkedIn Share this on Facebook Share this on Twitter
Become a Bronze Member for monthly eNewsletter, articles, and white papers.Submit
National Society of Accountants Member Link July 2008 Reduce Costs, Plan Your Estate, and More with a Captive By LANCE WALLACH, CLU , ChFC, CIMC
Your clients who are business owners are likely to be approached with information concerning a relatively new financial instrument called captive insurance. The term captive insurance is generic and refers to a broad spectrum of alternative insurance structures with the purpose of providing greater benefits than traditional insurance. Specifically, captive insurance can help your business clients potentially greatly lower their insurance costs, have more control in managing their insurance, and obtain coverage that might otherwise be unavailable or unaffordable. Some forms of captive insurance allow an insured or its assign to maintain an ownership interest in the underlying insurance company. As with any successful business, an owner of a captive can work with his or her advisors to best manage their insurance company. Another potential benefit is that of business and estate planning. This author stresses that a captive should never be formed unless the primary reason is business purpose. Captives should never be marketed by advisors as "wealth management" or "estate planning" tools. In fact, improper marketing of an otherwise compliant captive can lead to the loss of the captive's tax status as an insurance company, resulting in taxation and penalties of nearly one hundred percent of premiums. Yet it is a fact that a successful captive may be useful in business and estate planning. Ownership of a captive may be facilitated by a partnership or trust which is owned, controlled, or benefits a business owners' descendants. As an example, suppose that a business owner (Senior) wants to establish a captive insurance company in order to lower his insurance costs. The insurance company could be owned by a generation skipping trust currently controlled by Senior's children. The captive's premiums must be actuarially verifiable and the coverage must be wholly justifiable. The insurance sold by the captive needs to comport with all relevant statutes from both a regulatory and an IRS standpoint. If the captive's claims are less than actuarially anticipated, it may have retained earnings or profits. Depending on the type of captive insurance company, the tax rate levied on underwriting profits can be as little as zero percent. Over time, the insurance company's profits may be distributed as capital gains, dividends, or even loans to the beneficiaries of the insurance trust. The captive could even provide a funding source for future business opportunities. The ultimate effect of a compliant and successful captive could be to transfer a portion of the pre-tax premiums from Senior's business over to Senior's children, grandchildren, etc., without income, gift, or estate tax. The bottom line for any accountant or wealth advisor is that captives should be looked at as a way to garner significant insurance cost savings with a possibility of secondary benefits. Again, the author cannot overemphasize the importance that the captive must be designed to and operate as a compliant insurance company. The company must have real losses, real exposure to third party risk, and cannot be in any way an alter ego of or a savings account for the business owner. Captives can be a tremendous tool in helping businesses lower their insurance costs. This author has s
Help with Common IRS Problems: welfare benefit plan 419 lawsuit audit www.vebapla...
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BUSINESS
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Home>Featured Articles>Law Firm
John Hancock, law firm face tax shelter racketeering lawsuit
September 19, 2012|Nate Raymond | Reuters
267
(Reuters) - John Hancock Life Insurance Co and its law firm, Edwards Wildman Palmer, must face a class action accusing them of violating racketeering laws by marketing a tax shelter, a federal appeals court ruled on Wednesday.
The 6th U.S. Circuit Court of Appeals in Cincinnati in reversing a lower court's ruling, found that the insurer's customers had sufficient grounds to pursue a claim under the Racketeer Influenced and Corrupt Organization Act (RICO).
Help with Common IRS Problems: welfare benefit plan 419 lawsuit audit www.vebapla...
ReplyDeleteHelp with Common IRS Problems: welfare benefit plan 419 lawsuit audit www.vebapla...: welfare benefit plan 419 lawsuit audit www.vebaplan.com for help 412i (ny) - PandaHi beta 419 plan audit help www.taxaudit419.com www.veba...
BUSINESS
Front Page News Sports Business Lifestyles Opinion A&E
Home>Featured Articles>Law Firm
John Hancock, law firm face tax shelter racketeering lawsuit
September 19, 2012|Nate Raymond | Reuters
267
(Reuters) - John Hancock Life Insurance Co and its law firm, Edwards Wildman Palmer, must face a class action accusing them of violating racketeering laws by marketing a tax shelter, a federal appeals court ruled on Wednesday.
The 6th U.S. Circuit Court of Appeals in Cincinnati in reversing a lower court's ruling, found that the insurer's customers had sufficient grounds to pursue a claim under the Racketeer Influenced and Corrupt Organization Act (RICO).