Expansive New IRS Tax Shelter Disclosure, List Maintenance And Registration Rules — Final Regulations Issued Potentially Applicable To And Must Be Considered For Significant Transactions—Even Routine Transactions
Expansive New IRS Tax Shelter Disclosure, List Maintenance And Registration Rules — Final Regulations Issued Potentially Applicable To And Must Be Considered For Significant Transactions—Even Routine Transactions
Lance Wallach, CLU, ChFC, CIMC, the National Society of Accountants Speaker of the Year, consults on abusive tax shelters, captive insurance, conservation easements,bitcoin, ,insurance, estate planning, retirement and employee benefit plans,419,412i,section 79 plans and other IRS audit targets etc. As an expert witness his side has never lost a case. Lance Wallach advised thousands of high-income clients including hundreds of famous entertainers and athletes about captive insurance, 419, 412i section 79 and other abusive tax shelters. Lance also counseled famous Wall Street luminaries such as Hugh Downs and Louis Rukeyser, the host of 2 long-running programs Wall Street Week with Louis Rukeyser & Louis Rukeyser’s Wall Street. Speaker at over 50 annual conventions and author for more than 500 publications on tax reduction ideas, abusive welfare benefit and retirement plans, captive insurance companies,abusive tax shelters and conservation easements, cash balance plans, life settlements, premium finance, and more. He is a course developer and instructor for Continuing Professional Education courses administered by The American Institute of Certified Public Accountants. Lance is a prolific author, having written or collaborated on numerous books, including 'The CPA Guide to Life Insurance', published by BISK Education, 'The Team Approach to Tax and Financial Planning', published by the American Institute of CPA s, and most recently 'Protecting Clients from Fraud, Incompetence, and Scams', published by Wiley. He has been hired as an expert witness on some issues of which he speaks about, and to this day, Lance Wallach has never lost a case. Lance Wallach has appeared on radio and TV financial programs, most recently, on National Public Radio and NBC 25. Lance consults on abusive tax shelters like 412i,419, section 79, captive insurance bitcoin, easements, tax shelters and VEBA Plans. Additionally, Lance Wallach's expertise is sought after by the U.S. Securities and Exchange Commission, U.S. Department of Labor, the Enforcement Unit of the IRS The State Inusrance Dept etc.
Previously the realm of large corporations, a growing number of mid-sized and small businesses, professional service companies, and nonprofit organizations have been taking advantage of domestic and offshore captive insurance arrangements.
Although the establishment and management of a captive insurance company (“captive”) is legal, some have come under IRS scrutiny.
Benefits of captive insurance Captive insurance is a kind of self-insurance company formed to provide coverage for a wide variety of business property and casualty risks. Premiums are not paid to an outside insurance company, but are instead invested and accumulate over time. The funds can later be used to cover losses connected to business risks that are either uninsurable or for which commercial insurance coverage is unreasonably priced.
In addition to the primary benefits related to cash flow and risk management, if a captive has the required economic and business purpose its premiums provide significant tax, estate planning and asset protection benefits. Captives can also provide a company with access to the reinsurance market, which can also provide significant cost savings and an opportunity to make additional profits from insurance sales.
Types of captive insurance Captives take many forms, including pure (single parent), association (group), agency, alien, branch, diversified, reciprocal (risk retention groups), microcaptives, rent-a-captives and special purpose vehicles/reinsurers.
CJA and Associates got me audited Jan 15 CJA And Associates Life and Casualty Insurance Class Action Lawsuit 110 REVIEW RATING 3/5 They issued a plan that I believed was a good deal and would provide adequate coverage for my employees and save me money on taxes. However it did not, I ended up getting audited by the IRS and having my employees sue me. There is a class action suit being taken against these crooks for their captive insurance plan and as many people as possible should join in and put them out of business.... Read more › Was this review helpful?0 2
CJA And Associates - PRESIDENT Jul 05, 2013 CJA And Associates Financial Scams and Schemes Naples, Florida Insurance Fraud Negligence 9 268 REVIEW RATING 4/5 CJA SOLD US DEFECTIVE EMPLOYEE BENEFIT PLANS COSTING US HUNDREDS OF THOUSANDS OF DOLLARS AND IRS AUDITS AND PENALTIES ALL WHILE CJA WALKED AWAY WITH HUNDREDS OF THOUSANDS OF OUR DOLLARS IN COMMISSIONS ALSO THE INSURANCE COMPANY FIDELITY SECURITY LIFE INSURANCE IS PART OF THIS SCHEME TO DEFRAUD COMPANIES OUT OF MILLIONS OF DOLLARS THE IRS GOT LIST OF ALL OF CJA CUSTOMERS AND CAME AFTER THEM WITH... Read more › TRUST FRAUD 1 Was this review helpful?2 3 CJA and associates 419 412i section 79 scam audits lawsuits Oct 24, 2012 CJA And Associates Life and Casualty Insurance New York City, New York Life Insurance 33 523 REVIEW RATING 5/5 www.taxaduit419.com for help with 419 plans IRS audits lawsuits of 419 412i captive insurance and section 79 plans|. California Enrolled Agent January 2, 2009 Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000 By Lance Wallach & Ira Kaplan Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement...
CJA and Associates got me audited Jan 15 CJA And Associates Life and Casualty Insurance Class Action Lawsuit 110 REVIEW RATING 3/5 They issued a plan that I believed was a good deal and would provide adequate coverage for my employees and save me money on taxes. However it did not, I ended up getting audited by the IRS and having my employees sue me. There is a class action suit being taken against these crooks for their captive insurance plan and as many people as possible should join in and put them out of business.... Read more › Was this review helpful?0 2
CJA And Associates - PRESIDENT Jul 05, 2013 CJA And Associates Financial Scams and Schemes Naples, Florida Insurance Fraud Negligence 9 268 REVIEW RATING 4/5 CJA SOLD US DEFECTIVE EMPLOYEE BENEFIT PLANS COSTING US HUNDREDS OF THOUSANDS OF DOLLARS AND IRS AUDITS AND PENALTIES ALL WHILE CJA WALKED AWAY WITH HUNDREDS OF THOUSANDS OF OUR DOLLARS IN COMMISSIONS ALSO THE INSURANCE COMPANY FIDELITY SECURITY LIFE INSURANCE IS PART OF THIS SCHEME TO DEFRAUD COMPANIES OUT OF MILLIONS OF DOLLARS THE IRS GOT LIST OF ALL OF CJA CUSTOMERS AND CAME AFTER THEM WITH... Read more › TRUST FRAUD 1 Was this review helpful?2 3 CJA and associates 419 412i section 79 scam audits lawsuits Oct 24, 2012 CJA And Associates Life and Casualty Insurance New York City, New York Life Insurance 33 523 REVIEW RATING 5/5 www.taxaduit419.com for help with 419 plans IRS audits lawsuits of 419 412i captive insurance and section 79 plans|. California Enrolled Agent January 2, 2009 Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000 By Lance Wallach & Ira Kaplan Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement...
Lance Wallach, CLU, ChFC, CIMC, the National Society of Accountants Speaker of the Year, consults on abusive tax shelters, captive insurance, conservation easements,bitcoin, ,insurance, estate planning, retirement and employee benefit plans,419,412i,section 79 plans and other IRS audit targets etc. As an expert witness his side has never lost a case. Lance Wallach advised thousands of high-income clients including hundreds of famous entertainers and athletes about captive insurance, 419, 412i section 79 and other abusive tax shelters. Lance also counseled famous Wall Street luminaries such as Hugh Downs and Louis Rukeyser, the host of 2 long-running programs Wall Street Week with Louis Rukeyser & Louis Rukeyser’s Wall Street. Speaker at over 50 annual conventions and author for more than 500 publications on tax reduction ideas, abusive welfare benefit and retirement plans, captive insurance companies,abusive tax shelters and conservation easements, cash balance plans, life settlements, premium finance, and more. He is a course developer and instructor for Continuing Professional Education courses administered by The American Institute of Certified Public Accountants. Lance is a prolific author, having written or collaborated on numerous books, including 'The CPA Guide to Life Insurance', published by BISK Education, 'The Team Approach to Tax and Financial Planning', published by the American Institute of CPA s, and most recently 'Protecting Clients from Fraud, Incompetence, and Scams', published by Wiley. He has been hired as an expert witness on some issues of which he speaks about, and to this day, Lance Wallach has never lost a case. Lance Wallach has appeared on radio and TV financial programs, most recently, on National Public Radio and NBC 25. Lance consults on abusive tax shelters like 412i,419, section 79, captive insurance bitcoin, easements, tax shelters and VEBA Plans. Additionally, Lance Wallach's expertise is sought after by the U.S. Securities and Exchange Commission, U.S. Department of Labor, the Enforcement Unit of the IRS The State Inusrance Dept etc.
(a) General rule. Under § 1.6011–4(d) and the Instructions to Form 8886, Reportable Transaction Disclosure Statement, the required disclosure must identify and describe the transaction in sufficient detail for the IRS to be able to understand the tax structure of the reportable transaction and the identity of all parties involved in the transaction.
(b) Information required of all participants. For all participants, describing the transaction in sufficient detail includes, but is not limited to, describing on Form 8886 when and how the taxpayer became aware of the transaction.
(c) Information required of Captive. For Captive, describing the transaction in sufficient detail includes, but is not limited to, describing the following on Form 8886:
(1) whether Captive is reporting because (i) the amount of the liabilities incurred by Captive for insured losses and claim administration expenses during the Computation Period is less than 70 percent of the amount specified in section 2.01(e)(1) of this notice; (ii) Captive has at any time during the Computation Period made available as financing or otherwise conveyed or agreed to make available or convey any portion of the payments under the Contract to A, Insured, or a person related (within the meaning of § 267(b) or 707(b)) to A or Insured through a separate transaction, such as a guarantee, a loan, or other transfer; or (iii) both (i) and (ii); (2) under what authority Captive is chartered; (3) a description of all the type(s) of coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years); (4) a description of how the amounts treated as premiums for coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years) were determined, including the name and contact information of any actuary or underwriter who assisted in these determinations; (5) a description of any claims paid by Captive during the year or years of participation (if disclosure pertains to multiple years), and of the amount of, and reason for, any reserves reported by Captive on the annual statement; and (6) a description of the assets held by Captive during the year or years of participation (if disclosure pertains to multiple years); that is, the use Captive has made of its premium and investment income, including but not limited to, securities (whether or not registered), loans, real estate, or partnerships or other joint ventures, and an identification of the related parties involved in any transactions with respect to those assets. .06 Penalties Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to the penalty under § 6707A. Persons required to disclose these transactions under § 6111 who fail to do so may be subject to the penalty under § 6707(a). Persons required to maintain lists of advisees under § 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) may be subject to the penalty under § 6708(a). In addition, the IRS may impose other penalties on parties involved in these transactions, including the accuracy-related penalty under § 6662 or § 6662A.
SECTION 4. REQUEST FOR COMMENTS The Treasury Department and the IRS request comments on how the transaction might be addressed in published guidance.
Comments should be submitted in writing on or before January 30, 2017. Send submissions to CC:PA:LPD:PR (Notice 2016–66), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2016–66), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Comments may also be sent electronically, via the following e-mail address: Notice.comments@irscounsel.treas.gov. Please include “Notice 2016–66” in the subject line of any electronic communications. All comments submitted will be available for public inspection and copying.
Previously the realm of large corporations, a growing number of mid-sized and small businesses, professional service companies, and nonprofit organizations have been taking advantage of domestic and offshore captive insurance arrangements.
Although the establishment and management of a captive insurance company (“captive”) is legal, some have come under IRS scrutiny.
Benefits of captive insurance Captive insurance is a kind of self-insurance company formed to provide coverage for a wide variety of business property and casualty risks. Premiums are not paid to an outside insurance company, but are instead invested and accumulate over time. The funds can later be used to cover losses connected to business risks that are either uninsurable or for which commercial insurance coverage is unreasonably priced.
In addition to the primary benefits related to cash flow and risk management, if a captive has the required economic and business purpose its premiums provide significant tax, estate planning and asset protection benefits. Captives can also provide a company with access to the reinsurance market, which can also provide significant cost savings and an opportunity to make additional profits from insurance sales.
Types of captive insurance Captives take many forms, including pure (single parent), association (group), agency, alien, branch, diversified, reciprocal (risk retention groups), microcaptives, rent-a-captives and special purpose vehicles/reinsurers.
The IRS has been cracking down on conservation easement transactions for over ten years. Nevertheless, taxpayers have continued to claim charitable contribution deductions attributable to the donation of conservation easements and promoters have continued to assemble investments utilizing conservation easement charitable deductions. The IRS began focusing on syndicated conservation easement transactions when it issued Notice 2017-10, designating syndicated conservation easement transactions as listed transactions. These syndicated investments involve the use of partnerships to raise funds from investors, who are allocated a share of a charitable contribution deduction attributable to conservation easements donated on land owned by the partnership. In fall of 2018, the IRS doubled down on its attacks of these investments when syndicated conservation easements were added to the list of LB&I compliance campaigns. While the IRS continues to crack down on these arrangements, taxpayers have continued litigating the finer points of these transactions. On the flipside, DOJ has begun cracking down on promoters who market these transactions. Below are details on the most recent developments.
Pine Mountain Preserve v. Comm’r
This case involves three conservation easements covering various portions of an assemblage of over 2,000 acres of land. The land was located in what sounds like a beautiful location in Alabama for development of recreational and horse properties. Over three years, three different easements were granted on various portions of 1,300 of the 2,000 acres. The first two easements reserved the right to allow for small parcels of development, in a location to be agreed upon between the property owner and the charity holding the easement.
Today the IRS issued a press release announcing that it is significantly increasing enforcement actions for syndicated conservation easement donations and that these transactions are a priority compliance area for the agency. In the press release, the IRS stated that examinations of conservation easement donations are being coordinated across the agency. The IRS also announced that investigations relating to conservation easement deductions had been initiated by the IRS Criminal Investigation Division. Currently, there are more than 80 conservation easement cases pending in Tax Court, and the IRS outlined its commitment to bringing more cases to Tax Court where it believes the deduction should be disallowed.
For those wishing to protect their captive, we’ll get you compliant. And for those facing an audit, we’ll be your defense.
Businesses have been creating captive insurance companies (CICs) for more than 100 years in order to manage risk while taking advantage of the tax benefits offered by the insurance arrangement.
However, the IRS has started to evaluate possible abuses surrounding CICs, and has begun examinations in the area. For those businesses who are unprepared when facing examination, there can be consequences.
Expansive New IRS Tax Shelter
ReplyDeleteDisclosure, List Maintenance
And Registration Rules — Final
Regulations Issued
Potentially Applicable To And Must Be Considered For
Significant Transactions—Even Routine Transactions
Expansive New IRS Tax Shelter
ReplyDeleteDisclosure, List Maintenance
And Registration Rules — Final
Regulations Issued
Potentially Applicable To And Must Be Considered For
Significant Transactions—Even Routine Transactions
IRS Targets Captive Insurance Companies: Structuring Section 831(b)-Compliant Operating Documents
ReplyDeleteAvoiding Tax Penalties, Navigating IRS Safe Harbors, and Ensuring Premium Deductibility
Lance Wallach, CLU, ChFC, CIMC, the National Society of Accountants Speaker of the Year, consults on abusive tax shelters, captive insurance, conservation easements,bitcoin, ,insurance, estate planning, retirement and employee benefit plans,419,412i,section 79 plans and other IRS audit targets etc. As an expert witness his side has never lost a case.
DeleteLance Wallach advised thousands of high-income clients including hundreds of famous entertainers and athletes about captive insurance, 419, 412i section 79 and other abusive tax shelters. Lance also counseled famous Wall Street luminaries such as Hugh Downs and Louis Rukeyser, the host of 2 long-running programs Wall Street Week with Louis Rukeyser & Louis Rukeyser’s Wall Street.
Speaker at over 50 annual conventions and author for more than 500 publications on tax reduction ideas, abusive welfare benefit and retirement plans, captive insurance companies,abusive tax shelters and conservation easements, cash balance plans, life settlements, premium finance, and more. He is a course developer and instructor for Continuing Professional Education courses administered by
The American Institute of Certified Public Accountants.
Lance is a prolific author, having written or collaborated on numerous books, including 'The CPA Guide to Life Insurance', published by BISK Education, 'The Team Approach to Tax and Financial Planning', published by the American Institute of CPA s, and most recently 'Protecting Clients from Fraud, Incompetence, and Scams', published by Wiley. He has been hired as an expert witness on some issues of which he speaks about, and to this day, Lance Wallach has never lost a case.
Lance Wallach has appeared on radio and TV financial programs, most recently, on National Public Radio and NBC 25. Lance consults on abusive tax shelters like 412i,419, section 79, captive insurance bitcoin, easements, tax shelters and VEBA Plans.
Additionally, Lance Wallach's expertise is sought after by the U.S. Securities and Exchange Commission, U.S. Department of Labor, the Enforcement Unit of the IRS The State Inusrance Dept etc.
IRS Targets Captive Insurance Companies: Structuring Section 831(b)-Compliant Operating Documents
ReplyDeleteAvoiding Tax Penalties, Navigating IRS Safe Harbors, and Ensuring Premium Deductibility
Previously the realm of large corporations, a growing number of mid-sized and small businesses, professional service companies, and nonprofit organizations have been taking advantage of domestic and offshore captive insurance arrangements.
DeleteAlthough the establishment and management of a captive insurance company (“captive”) is legal, some have come under IRS scrutiny.
Benefits of captive insurance
Captive insurance is a kind of self-insurance company formed to provide coverage for a wide variety of business property and casualty risks. Premiums are not paid to an outside insurance company, but are instead invested and accumulate over time. The funds can later be used to cover losses connected to business risks that are either uninsurable or for which commercial insurance coverage is unreasonably priced.
In addition to the primary benefits related to cash flow and risk management, if a captive has the required economic and business purpose its premiums provide significant tax, estate planning and asset protection benefits. Captives can also provide a company with access to the reinsurance market, which can also provide significant cost savings and an opportunity to make additional profits from insurance sales.
Types of captive insurance
Captives take many forms, including pure (single parent), association (group), agency, alien, branch, diversified, reciprocal (risk retention groups), microcaptives, rent-a-captives and special purpose vehicles/reinsurers.
CJA and Associates got me audited
ReplyDeleteJan 15 CJA And Associates Life and Casualty Insurance Class Action Lawsuit 110 REVIEW RATING 3/5
They issued a plan that I believed was a good deal and would provide adequate coverage for my employees and save me money on taxes. However it did not, I ended up getting audited by the IRS and having my employees sue me. There is a class action suit being taken against these crooks for their captive insurance plan and as many people as possible should join in and put them out of business.... Read more ›
Was this review helpful?0 2
CJA And Associates - PRESIDENT
Jul 05, 2013 CJA And Associates Financial Scams and Schemes Naples, Florida Insurance Fraud Negligence 9 268 REVIEW RATING 4/5
CJA SOLD US DEFECTIVE EMPLOYEE BENEFIT PLANS COSTING US HUNDREDS OF THOUSANDS OF DOLLARS AND IRS AUDITS AND PENALTIES ALL WHILE CJA WALKED AWAY WITH HUNDREDS OF THOUSANDS OF OUR DOLLARS IN COMMISSIONS ALSO THE INSURANCE COMPANY FIDELITY SECURITY LIFE INSURANCE IS PART OF THIS SCHEME TO DEFRAUD COMPANIES OUT OF MILLIONS OF DOLLARS THE IRS GOT LIST OF ALL OF CJA CUSTOMERS AND CAME AFTER THEM WITH... Read more ›
TRUST FRAUD 1
Was this review helpful?2 3
CJA and associates 419 412i section 79 scam audits lawsuits
Oct 24, 2012 CJA And Associates Life and Casualty Insurance New York City, New York Life Insurance 33 523 REVIEW RATING 5/5
www.taxaduit419.com for help with 419 plans IRS audits lawsuits of 419 412i captive insurance and section 79 plans|. California Enrolled Agent January 2, 2009 Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000 By Lance Wallach & Ira Kaplan Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement...
CJA and Associates got me audited
ReplyDeleteJan 15 CJA And Associates Life and Casualty Insurance Class Action Lawsuit 110 REVIEW RATING 3/5
They issued a plan that I believed was a good deal and would provide adequate coverage for my employees and save me money on taxes. However it did not, I ended up getting audited by the IRS and having my employees sue me. There is a class action suit being taken against these crooks for their captive insurance plan and as many people as possible should join in and put them out of business.... Read more ›
Was this review helpful?0 2
CJA And Associates - PRESIDENT
Jul 05, 2013 CJA And Associates Financial Scams and Schemes Naples, Florida Insurance Fraud Negligence 9 268 REVIEW RATING 4/5
CJA SOLD US DEFECTIVE EMPLOYEE BENEFIT PLANS COSTING US HUNDREDS OF THOUSANDS OF DOLLARS AND IRS AUDITS AND PENALTIES ALL WHILE CJA WALKED AWAY WITH HUNDREDS OF THOUSANDS OF OUR DOLLARS IN COMMISSIONS ALSO THE INSURANCE COMPANY FIDELITY SECURITY LIFE INSURANCE IS PART OF THIS SCHEME TO DEFRAUD COMPANIES OUT OF MILLIONS OF DOLLARS THE IRS GOT LIST OF ALL OF CJA CUSTOMERS AND CAME AFTER THEM WITH... Read more ›
TRUST FRAUD 1
Was this review helpful?2 3
CJA and associates 419 412i section 79 scam audits lawsuits
Oct 24, 2012 CJA And Associates Life and Casualty Insurance New York City, New York Life Insurance 33 523 REVIEW RATING 5/5
www.taxaduit419.com for help with 419 plans IRS audits lawsuits of 419 412i captive insurance and section 79 plans|. California Enrolled Agent January 2, 2009 Abusive 412(i) Retirement Plans Can Get Accountants Fined $200,000 By Lance Wallach & Ira Kaplan Most insurance agents sell 412(i) retirement plans!. The large insurance commissions generate some of the enthusiasm'. Unlike other retirement...
FILED UNDER:YOUR PRACTICE, PRACTICE MANAGEMENT
ReplyDeleteHow to Avoid IRS Fines for You and Your Clients
OCT 26, 2010 | BY LANCE WALLACH
Lance Wallach, CLU, ChFC, CIMC, the National Society of Accountants Speaker of the Year, consults on abusive tax shelters, captive insurance, conservation easements,bitcoin, ,insurance, estate planning, retirement and employee benefit plans,419,412i,section 79 plans and other IRS audit targets etc. As an expert witness his side has never lost a case.
ReplyDeleteLance Wallach advised thousands of high-income clients including hundreds of famous entertainers and athletes about captive insurance, 419, 412i section 79 and other abusive tax shelters. Lance also counseled famous Wall Street luminaries such as Hugh Downs and Louis Rukeyser, the host of 2 long-running programs Wall Street Week with Louis Rukeyser & Louis Rukeyser’s Wall Street.
Speaker at over 50 annual conventions and author for more than 500 publications on tax reduction ideas, abusive welfare benefit and retirement plans, captive insurance companies,abusive tax shelters and conservation easements, cash balance plans, life settlements, premium finance, and more. He is a course developer and instructor for Continuing Professional Education courses administered by
The American Institute of Certified Public Accountants.
Lance is a prolific author, having written or collaborated on numerous books, including 'The CPA Guide to Life Insurance', published by BISK Education, 'The Team Approach to Tax and Financial Planning', published by the American Institute of CPA s, and most recently 'Protecting Clients from Fraud, Incompetence, and Scams', published by Wiley. He has been hired as an expert witness on some issues of which he speaks about, and to this day, Lance Wallach has never lost a case.
Lance Wallach has appeared on radio and TV financial programs, most recently, on National Public Radio and NBC 25. Lance consults on abusive tax shelters like 412i,419, section 79, captive insurance bitcoin, easements, tax shelters and VEBA Plans.
Additionally, Lance Wallach's expertise is sought after by the U.S. Securities and Exchange Commission, U.S. Department of Labor, the Enforcement Unit of the IRS The State Inusrance Dept etc.
(a) General rule. Under § 1.6011–4(d) and the Instructions to Form 8886, Reportable Transaction Disclosure Statement, the required disclosure must identify and describe the transaction in sufficient detail for the IRS to be able to understand the tax structure of the reportable transaction and the identity of all parties involved in the transaction.
ReplyDelete(b) Information required of all participants. For all participants, describing the transaction in sufficient detail includes, but is not limited to, describing on Form 8886 when and how the taxpayer became aware of the transaction.
(c) Information required of Captive. For Captive, describing the transaction in sufficient detail includes, but is not limited to, describing the following on Form 8886:
(1) whether Captive is reporting because (i) the amount of the liabilities incurred by Captive for insured losses and claim administration expenses during the Computation Period is less than 70 percent of the amount specified in section 2.01(e)(1) of this notice; (ii) Captive has at any time during the Computation Period made available as financing or otherwise conveyed or agreed to make available or convey any portion of the payments under the Contract to A, Insured, or a person related (within the meaning of § 267(b) or 707(b)) to A or Insured through a separate transaction, such as a guarantee, a loan, or other transfer; or (iii) both (i) and (ii);
(2) under what authority Captive is chartered;
(3) a description of all the type(s) of coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years);
(4) a description of how the amounts treated as premiums for coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years) were determined, including the name and contact information of any actuary or underwriter who assisted in these determinations;
(5) a description of any claims paid by Captive during the year or years of participation (if disclosure pertains to multiple years), and of the amount of, and reason for, any reserves reported by Captive on the annual statement; and
(6) a description of the assets held by Captive during the year or years of participation (if disclosure pertains to multiple years); that is, the use Captive has made of its premium and investment income, including but not limited to, securities (whether or not registered), loans, real estate, or partnerships or other joint ventures, and an identification of the related parties involved in any transactions with respect to those assets.
.06 Penalties
Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to the penalty under § 6707A. Persons required to disclose these transactions under § 6111 who fail to do so may be subject to the penalty under § 6707(a). Persons required to maintain lists of advisees under § 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) may be subject to the penalty under § 6708(a). In addition, the IRS may impose other penalties on parties involved in these transactions, including the accuracy-related penalty under § 6662 or § 6662A.
SECTION 4. REQUEST FOR COMMENTS
The Treasury Department and the IRS request comments on how the transaction might be addressed in published guidance.
Comments should be submitted in writing on or before January 30, 2017. Send submissions to CC:PA:LPD:PR (Notice 2016–66), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2016–66), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Comments may also be sent electronically, via the following e-mail address: Notice.comments@irscounsel.treas.gov. Please include “Notice 2016–66” in the subject line of any electronic communications. All comments submitted will be available for public inspection and copying.
Previously the realm of large corporations, a growing number of mid-sized and small businesses, professional service companies, and nonprofit organizations have been taking advantage of domestic and offshore captive insurance arrangements.
ReplyDeleteAlthough the establishment and management of a captive insurance company (“captive”) is legal, some have come under IRS scrutiny.
Benefits of captive insurance
Captive insurance is a kind of self-insurance company formed to provide coverage for a wide variety of business property and casualty risks. Premiums are not paid to an outside insurance company, but are instead invested and accumulate over time. The funds can later be used to cover losses connected to business risks that are either uninsurable or for which commercial insurance coverage is unreasonably priced.
In addition to the primary benefits related to cash flow and risk management, if a captive has the required economic and business purpose its premiums provide significant tax, estate planning and asset protection benefits. Captives can also provide a company with access to the reinsurance market, which can also provide significant cost savings and an opportunity to make additional profits from insurance sales.
Types of captive insurance
Captives take many forms, including pure (single parent), association (group), agency, alien, branch, diversified, reciprocal (risk retention groups), microcaptives, rent-a-captives and special purpose vehicles/reinsurers.
The IRS has been cracking down on conservation easement transactions for over ten years. Nevertheless, taxpayers have continued to claim charitable contribution deductions attributable to the donation of conservation easements and promoters have continued to assemble investments utilizing conservation easement charitable deductions. The IRS began focusing on syndicated conservation easement transactions when it issued Notice 2017-10, designating syndicated conservation easement transactions as listed transactions. These syndicated investments involve the use of partnerships to raise funds from investors, who are allocated a share of a charitable contribution deduction attributable to conservation easements donated on land owned by the partnership. In fall of 2018, the IRS doubled down on its attacks of these investments when syndicated conservation easements were added to the list of LB&I compliance campaigns. While the IRS continues to crack down on these arrangements, taxpayers have continued litigating the finer points of these transactions. On the flipside, DOJ has begun cracking down on promoters who market these transactions. Below are details on the most recent developments.
ReplyDeletePine Mountain Preserve v. Comm’r
This case involves three conservation easements covering various portions of an assemblage of over 2,000 acres of land. The land was located in what sounds like a beautiful location in Alabama for development of recreational and horse properties. Over three years, three different easements were granted on various portions of 1,300 of the 2,000 acres. The first two easements reserved the right to allow for small parcels of development, in a location to be agreed upon between the property owner and the charity holding the easement.
Today the IRS issued a press release announcing that it is significantly increasing enforcement actions for syndicated conservation easement donations and that these transactions are a priority compliance area for the agency. In the press release, the IRS stated that examinations of conservation easement donations are being coordinated across the agency. The IRS also announced that investigations relating to conservation easement deductions had been initiated by the IRS Criminal Investigation Division. Currently, there are more than 80 conservation easement cases pending in Tax Court, and the IRS outlined its commitment to bringing more cases to Tax Court where it believes the deduction should be disallowed.
ReplyDeleteFor those wishing to protect their captive, we’ll get you compliant.
ReplyDeleteAnd for those facing an audit, we’ll be your defense.
Businesses have been creating captive insurance companies (CICs) for more than 100 years in order to manage risk while taking advantage of the tax benefits offered by the insurance arrangement.
However, the IRS has started to evaluate possible abuses surrounding CICs, and has begun examinations in the area. For those businesses who are unprepared when facing examination, there can be consequences.