Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : Report: #1045981 Complaint Review: CJA Marketing
Raymond Ankner -Expected to be the biggest life insurance failure in Illinois : Report: #1045981 Complaint Review: CJA Marketing: CJA Marketing CJA and Associates Sold defective retirement plans costing us hundreds of thousands of dollars Beware Of This Company T...
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Section 79 Scams and Captive Insurance History
ReplyDeleteWhen trying to understand how a product becomes a target of government scrutiny it helps to know its history.
In the case of plans that fall under Internal Revenue Code Section 79, that history is complex.
Insurance companies, agents, financial planners, and others have pushed abusive 419 and 412i plans for
years. They claimed business owners could obtain large tax deductions. Insurance companies, agents and
others earned very large life insurance commissions in the process. Eventually, the IRS cracked down on the
unsuspecting business owners. Not only did they lose the tax deductions, but they were also fined, in addition
to being charged penalties and interest. A skilled CPA with extensive IRS experience could usually eliminate
the penalties and reduce the fines. Most accountants, tax attorneys and others have been unsuccessful in
accomplishing this.
After the business owner was assessed the fines and lost his tax deduction, he had another huge, unforeseen
problem. The IRS then came back and fined him a huge amount of money for not telling on himself under IRC
6707A. If you participate in a listed or reportable transaction, you must alert the IRS or face a large fine. In
essence, you must alert the IRS if you were in a transaction that has the possibility of tax avoidance or
evasion. Not only must you file Form 8886 telling on yourself, but the form needs to be filed properly, and
done every year that you are in the plan in any way at all, even if you are no longer making contributions.
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