IRS IS AFTER CAPTIVE INSURANCE AND CONSERVATION EASEMENTS

The IRS has put out yet another news release, IR-2020-226, to warn taxpayers who have engaged in abusive risk-pooled 831(b) captive insurance transactions (a/k/a "microcaptives") to consult with independent tax counsel before making any tax filings regarding the transaction. The IRS is also warns that its previous settlement terms offered to taxpayers are probably not going to be available to them in the future, and that any settlement with the IRS "will require additional concessions by the taxpayer." What additional concessions? The IRS then explains: For those taxpayers that do not exit the transaction and continue taking such deductions, the IRS will disallow tax benefits from transactions that are determined to be abusive and may also require domestic captives to include premium payments in income and assert a withholding liability for foreign captives. The IRS will also assert penalties, as appropriate, including the strict liability penalty that applies to transactions that lack economic substance. EASEMENT AUDITS A class-action claiming that the promoters of syndicated conservation easements knew from the outset that their deals violated tax laws is a new legal avenue for aggrieved investors as the Internal Revenue Service and the Justice Department grind through their own crackdowns. Lance Wallach receives hundreds of calls annually from people who are trying to get out of these scams. Google Lance Wallach and your advisor. Who do you trust? 516-236-8440 Wallachinc@gmail.com

IRS CRACKS DOWN ON CONSERVATION EASEMENTS AND CAPTIVE INSURANCE

IRS CRACKS DOWN ON CONSERVATION EASEMENTS AND CAPTIVE INSURANCE IRS audit examinations, now accelerated and continued to usually disallow easement deductions in full. In the majority of preservation easement audits, the IRS has used a professional appraiser who is an IRS employee rather than relying on an independent outside contractor. The “Dirty Dozen” listing, the revised IRS donation forms for non-cash contributions and Form 990 changes (which newly flag easement donations), the increased examinations of donee organizations and some officers, the high level of audit coverage without settlements, and Appeals Officers sustaining the audit results, have added to the perception that the IRS is overreaching on this issue. CAPTIVE AUDITS Significant abuse of small captive insurance companies (CICs) as tax shelters has earned CICs a place on the IRS’s 2015 “Dirty Dozen” list of tax scams. Tax advisors, companies with CICs, and companies looking to establish CICs should be aware of the increased tax audit risk related to CICs. Lance Wallach receives hundreds of calls annually to help people fight the IRS and get their money back from the promoters of these scams. As an expert witness, Lance's side has never lost a lawsuit. Google Lance Wallach and your advisor, who do you trust? 516-236-8440 Wallachinc@gmail.com

CONSERVATION EASEMENTS, THE IRS WILL GET YOU

CONSERVATION EASEMENTS, THE IRS WILL GET YOU The IRS knows right where to look to see if the partnership or LLC fighting the battle has enough capital to fight the good fight – the balance sheet. Is this partnership well capitalized or not? If not, then there won’t be sufficient funds to fight the IRS at the IRS Exam, IRS Appeals levels, then in Tax Court, if necessary in Appeals Court, and if necessary back in Tax Court. The IRS is taking an aggressive approach and is auditing every single syndicated Conservation Easement Deduction, and likely will issue notices of deficiency for all. Legal fees can easily exceed what partnerships have in reserves, and if so, partners will have to infuse additional capital into the partnership in order to keep fighting the IRS. Moreover, even if a partnership does keep up the fight, in light of these recent taxpayer victories, does it mean that all conservation easement cases will be decided in favor of taxpayers? Not even close. It is therefore critical that partners consider that a deduction today may very well turn into a tax bill later, plus interest. The IRS is entitled to interest at 3% above Prime on tax, which is due from the date the tax was due. Looking back to Pine Mountain, if the partners in that entity end up owing tax, they will owe interest since 2005. Nerve: Fighting the IRS is no easy task, even with a good lawyer by your side. It is important to consider whether you are the kind of person who can sleep at night knowing that the IRS may literally come knocking on your door. Taxpayers who participate in conservation easements can expect to have the deduction disallowed until they are proven right – and this is not an emotional place that many taxpayers are comfortable in. Conclusion In light of these recent taxpayer wins in Tax Court and at the Eleventh Circuit, those who have a stake in the conservation easement world have good reason to take heart. But as any attorney who has actually tried tax cases will tell you, trials are unpredictable and expensive. Indeed, fighting with the IRS even before getting to trial is expensive and takes a toll on those who are forced to do so. One client of mine put it this way: “when the battle with the IRS first began, whenever I went out to the mailbox, my hands would start trembling.” Taxpayers who are considering whether or not to settle should be encouraged by the recent hard-won taxpayer victories, but take care not to discount the cost of a trial and appeal, both from a financial and emotional perspective. Lance Wallach receives hundreds of calls annually to help people fight the IRS and get their money back from the promoters of these scams. As an expert witness, Lance's side has never lost a lawsuit. Google Lance Wallach and your advisor, who do you trust? 516-236-8440 Wallachinc@gmail.com

Conservation Easements and Captive Insurance, get audited

The IRS stated that the agency continued to step up its pursuit of those who promote and make use of abusive tax shelters, including syndicated conservation easements, where it saw successful Tax Court litigation and the completion of the first settlement initiative, the report noted. [IR-2021-03 (Jan. 5, 2021)] Two Atlanta tax professionals pleaded guilty to conspiracy charges in what the U.S. Justice Department touted as its first criminal case involving tax-advantaged land deals known as syndicated conservation easements. Captive insurance: The Treasury Department and the IRS believe this transaction (“micro-captive transaction”) has a potential for tax avoidance or evasion. See IR–2016–25 (discussing characteristics of an abusive micro-captive insurance structure). However, the Treasury Department and the IRS lack sufficient information to identify which § 831(b) arrangements should be identified specifically as a tax avoidance transaction and may lack sufficient information to define the characteristics that distinguish the tax avoidance transactions from other § 831(b) related-party transactions. This notice identifies the transaction described in section 2.01 of this notice and substantially similar transactions as transactions of interest for purposes of § 1.6011–4(b)(6) of the Income Tax Regulations and §§ 6111 and 6112 of the Code. This notice also alerts persons involved in such transactions to certain responsibilities and penalties that may arise from their involvement with these transactions. Lance Wallach has received hundreds of calls to help people in these tax shelters fight the IRS and sue the salesmen of these tax scams. 516 2368440 As an expert witness Lance Wallach has never lost a case. Google him and your advisor, who do YOU trust?

IRS AUDITS CONSERVATION EASEMENTS

IRS AUDITS CONSERVATION EASEMENTS Last month, the Senate Finance Committee released a report on syndicated conservation easement transactions. In its report, the committee laid out an unflattering view of the syndicated arrangements, finding that “syndicated conservation-easement transactions appear to be highly abusive tax shelters.” This past week, the Senate Finance Committee released IRS data reflecting a “significant increase in conservation easement transactions,” and its chairman expressed concerns about what he characterized as the “serious and persistent abuse of the syndicated conservation easement program.” The Finance Committee’s report indicates that the IRS is either auditing or planning to audit more than 80 percent of partnerships identified as vehicles for syndicated conservation easement. Many of these audits will take place under the new BBA partnership audit regime. The dollars at stake are significant. Between 2010 and 2017, the IRS estimates that syndicated conservation-easement transactions led to nearly $27 billion in charitable deductions for investors. Lance Wallach receives hundreds of calls annually to help people fight the IRS and get their money back from the promoters of these scams. As an expert witness, Lance's side has never lost a lawsuit. Google Lance Wallach and your advisor, who do you trust? 516-236-8440 Wallachinc@gmail.com

Captive insurance and conservation easements, IRS will audit you.

The IRS released an advance version of Notice 2016-66 that identifies a type of transaction involving a “micro-captive insurance” structure as a “transaction of interest”—i.e., a tax avoidance transaction—for purposes of Reg. section 1.6011-4(b)(6) and sections 6111 and 6112. Notice 2016-66 [PDF 44 KB] states that these “micro-captive transactions” have the potential for tax avoidance or evasion. Taxpayers engaged in these transactions must disclose the transactions. A failure to disclose will be subject to the penalty under section 6707A or section 6707(a). in 2019, the IRS added syndicated conservation easement transactions to its annual "Dirty Dozen" list of tax scams. Lance Wallach has received hundreds of phone calls to fight the IRS, and to get all peoples money back from the promoters that sold these scam tax shelters. As an expert witness Lance Wallach has never lost a case. If you are in a captive or conservation easement and want to be made whole contact wallachinc@gmail.com or call 516-236-8440. Google Lance Wallach and your advisor. Who do you trust.

IRS's disallowance of a charitable cons

Two opinions issued recently by the Tax Court addressed different arguments made by a taxpayer challenging the IRS's disallowance of a charitable conservation easement deduction. In a memorandum opinion, the Tax Court upheld the IRS's disallowance of a partnership's deduction for the conservation easement because the conservation purpose of the easement was not preserved "in perpetuity" under Regs. Sec. 1.170A-14(g)(6)(ii), which prescribes the relative value of a donee's property rights and entitlement to proceeds from any extinguishment of the easement and subsequent sale or other disposition of the property. In a separate reported opinion, the Tax Court rejected the taxpayer's argument that Regs. Sec. 1.170A-14(g)(6)(ii) was an invalid regulation. According to the court, the regulation had been properly promulgated under the Administrative Procedure Act (APA), and its substance was valid under the two-part Chevron test (Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984)). Micro-captives are captives with $2.2 million or less in premium. The IRS has been warning about these micro-captives for several years and placed them on its annual “Dirty Dozen” list of tax scams. The IRS has consistently disallowed the tax benefits claimed by taxpayers in these micro-captive structures. If you are in a captive or conservation easement you will be audited. Get help ASAP. Google Lance Wallach and your advisor, who do you trust?

Crypto Twitter

In 2021, the IRS will continue its long effort to bring virtual currency holders into compliance, leveraging recent filings, international cooperation, and robust data analytics. If you believe you’re a target of a virtual currency tax investigation from the IRS, then you should immediately contact Lance Wallach before disclosing anything to the government. 516-236-8440 Wallachinc@gmail.com https://cryptocurrencyrelief.com/

Crypto Twitter

The IRS and Treasury department have extended the deadline for 2020 bitcoin tax filings to Monday, May 17th. Contact Lance Wallach for assistance. 516-236-8440 Wallachinc@gmail.com https://cryptocurrencyrelief.com/

Crypto Twitter

If you believe you’re a target of a cryptocurrency tax investigation from the IRS, then you should immediately contact Lance Wallach before disclosing anything to the government. Cryptocurrency compliance investigations may also turn into larger, criminal tax investigations. These situations can be a massive intrusion into your personal and professional life and your accountant could be compelled to tell the IRS everything you’ve told him. Contact Lance Wallach at 516-236-8440 or Wallachinc@gmail.com

Crypto Twitter

The sale or other exchange of virtual currencies, or the use of virtual currencies to pay for goods or services, or holding virtual currencies as an investment, generally has tax consequences that could result in tax liability. Contact Lance Wallach 516-236-8440 Wallachinc@gmail.com https://cryptocurrencyrelief.com/