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419 412i section 79 scams
By lance wallach, 2011-08-12




Advisers staring at a new ‘slew' of litigation from small-business clients
Five-year-old change in tax has left some small businesses and certain benefit plans subject to IRS fines; the advisers who sold these plans may pay the price

By Jessica Toonkel Marquez

October 14, 2009
Financial advisers who have sold certain types of retirement and other benefit plans to small businesses might soon be facing a wave of lawsuits — unless Congress decides to take action soon.
For years, advisers and insurance brokers have sold the 412(i) plan, a type of defined-benefit pension plan, and the 419 plan, a health and welfare plan, to small businesses as a way of providing such benefits to their employees, while also receiving a tax break.
However, in 2004, Congress changed the law to require that companies file with the Internal Revenue Service if they had these plans in place. The law change was intended to address tax shelters, particularly those set up by large companies.
Many companies and financial advisers didn't realize that this was a cause for concern, however, and now employers are receiving a great deal of scrutiny from the federal government, according to experts.
The IRS has been aggressive in auditing these plans. The fines for failing to notify the agency about them are $200,000 per business per year the plan has been in place and $100,000 per individual.
So advisers who sold these plans to small business are now slowly starting to become the target of litigation from employers who are subject to these fines.
“There is a slew of litigation already against advisers that sold these plans,” said Lance Wallach, an expert on 412(i) and 419 plans. “I get calls from lawyers every week asking me to be an expert witness on these cases.”
Mr. Wallach declined to cite any specific suits. But one adviser who has been selling 412(i) plans for years said his firm is already facing six lawsuits over the sale of such plans and has another two pending.
“My legal and accounting bills last year were $864,000,” said the adviser, who asked not to be identified. “And if this doesn't get fixed, everyone and their uncle will sue us.”
Currently, the IRS has instituted a moratorium on collecting these fines until the end of the year in the hope that Congress will address the issue.
In a Sept. 24 letter to Sens. Max Baucus, D-Mont., Charles Boustany Jr., R-La., and Charles Grassley, R-Iowa, IRS Commissioner Douglas H. Shulman wrote: “I understand that Congress is still considering this issue and that a bipartisan, bicameral bill may be in the works … To give Congress time to address the issue, I am writing to extend the suspension of collection enforcement action through Dec. 31.”
But with so much of Congress' attention on health care reform at the moment, experts are worried that the issue may go unresolved indefinitely.
“If Congress doesn't amend the statute, and clients find themselves having to pay these fines, they will absolutely go after the advisers that sold these plans to them,”
www.taxaudit419.com
Comments
By Lance wallach, 2011-11-28 09:48:39
Apply to join FinanceExperts.org, the leading organization for accounting, legal, insurance, finance, and other experts in related fields. If approved by our board,you will be allowed to co author articles written by our experts which appear in 51 national publications, be quoted in best selling books that our experts author and much much more.. In addition, business owners and high income people are referred to our experts by zip code. No more than 1000 experts are accepted as members, and no more than one expert per zip code.There are currently 11 openings. You do not have to be a member to use the financeExperts.org message forum. Email your bio to lanwalla@aol.com. If approved you will be notified.All the experts share the cost of running the organization, which is about $97 per member per year. That cost will go down for renewals, as the sponsors start paying more.

Good luck.
By Imrana, 2015-12-30 02:31:59
, I favor radical tax simofilicatipn. An elimination of corporate and individul income taxes, and a 10 percent flat national sales tax (perhaps exempting food) makes sense to me, plus elimination of several federal departments, such as Education, USDA and Commerce, and demobilization of our military.We can make a better economy for America, if we have the guts to make some cuts.
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