Monday, February 13, 2017 Benistar,Benistar Plan, 419 and others,Benistar Audits Benistar,Benistar Plan, 419 and others,Benistar Audits Posted by Robert Sherman at 3:51 PM Email This BlogThis! Share to Twitter Share to Facebook Share to Pinterest
Lance WallachNovember 14, 2016 at 1:30 PM BAD BAD BENISTAR?
ecurities Act. Here the court determined that “Plaintiffs are not employer-sponsors, but rather, employers who, acting on behalf of its employees, brought this suit pursuant to ERISA §503.” Since employers cannot sue under ERISA, the court dismissed all ERISA related claims made by Plaintiffs.
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Robert ShermanNovember 22, 2016 at 10:26 AM Tax Court Drops The Hammer On Employee Welfare Plan
Peter J Reilly , CONTRIBUTOR I focus on the tax issues of individuals, businesses & more
Opinions expressed by Forbes Contributors are their own. TWEET THIS When a Tax Court judge writes “purported” it generally means something like “Liar, liar pants on fire” or bovine excrement. Northwestern’s conservatism in not getting caught up in the 419 mania is another mark in its favor. For the last two decades Lance Wallach has been a voice crying out in the wilderness on the perils of 419(e) employee welfare plans. Lance is not an attorney, CPA or actuary. A graduate of Baruch College he trained as a financial planner with Mutual Benefit Life and then moved on to New England Life where he was a top producer selling life insurance as part of sophisticated plans. Now he speaks and serves as an expert witness helping to repair the damage done by insurance companies who promoted abusive tax plans.
The Plan That Should Have Stood Up?
Somehow or other Lance and I became facebook buds and when I saw the decision in Our Country Home Enterpise Inc, I immediately contacted him. I thought he would view the decision as vindication of his view on these plans. I was surprised when he told me that he thought the decision was wrong. His assessment of the situation was that Ron Snyder, whose Sterling Plan was about the only 419 plan which should have worked, was too frugal when it came to hiring lawyers to defend the plan. This might be understandable, because being much less aggressive, the plan was not as lucrative for the sponsor and Ron, according to this letter was having trouble getting people to chip in for the defense.
Lance told me that he had met with the IRS in 2002 and explained the abuse to them and pointed out the most abusive promoters. Ron Snyder had come along and had tweaked his plan based on informal IRS feedback making him optimistic that he would be successful in Tax Court.
What Can Be Abusive About These Plans?
In the extreme version a closely held corporation makes contributions to the plan. Rank and file employees do not get any benefits. The contributions are deducted by the corporation. The contributions go to fund whole dollar life insurance whose beneficiaries are designated by the principals. The principals are able to access the cash surrender value of the insurance contracts. The beneficiaries do not recognize any income.
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Monday, February 13, 2017
Benistar,Benistar Plan, 419 and others,Benistar Audits
Benistar,Benistar Plan, 419 and others,Benistar Audits
Posted by Robert Sherman at 3:51 PM
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Labels: 419 plan, 419 Plan Problems, 419 Plans, Benistar, Benistar Audits, Benistar Plan, Benistar Plans, Benistar Problems, Grist Mill Trust
2 comments:
Lance WallachNovember 14, 2016 at 1:30 PM
BAD BAD BENISTAR?
ecurities Act. Here the court determined that “Plaintiffs are not employer-sponsors, but rather, employers who, acting on behalf of its employees, brought this suit pursuant to ERISA §503.” Since employers cannot sue under ERISA, the court dismissed all ERISA related claims made by Plaintiffs.
READ MORE NOW
ReplyDelete
Robert ShermanNovember 22, 2016 at 10:26 AM
Tax Court Drops The Hammer On Employee Welfare Plan
Peter J Reilly , CONTRIBUTOR
I focus on the tax issues of individuals, businesses & more
Opinions expressed by Forbes Contributors are their own.
TWEET THIS
When a Tax Court judge writes “purported” it generally means something like “Liar, liar pants on fire” or bovine excrement.
Northwestern’s conservatism in not getting caught up in the 419 mania is another mark in its favor.
For the last two decades Lance Wallach has been a voice crying out in the wilderness on the perils of 419(e) employee welfare plans. Lance is not an attorney, CPA or actuary. A graduate of Baruch College he trained as a financial planner with Mutual Benefit Life and then moved on to New England Life where he was a top producer selling life insurance as part of sophisticated plans. Now he speaks and serves as an expert witness helping to repair the damage done by insurance companies who promoted abusive tax plans.
The Plan That Should Have Stood Up?
Somehow or other Lance and I became facebook buds and when I saw the decision in Our Country Home Enterpise Inc, I immediately contacted him. I thought he would view the decision as vindication of his view on these plans. I was surprised when he told me that he thought the decision was wrong. His assessment of the situation was that Ron Snyder, whose Sterling Plan was about the only 419 plan which should have worked, was too frugal when it came to hiring lawyers to defend the plan. This might be understandable, because being much less aggressive, the plan was not as lucrative for the sponsor and Ron, according to this letter was having trouble getting people to chip in for the defense.
Lance told me that he had met with the IRS in 2002 and explained the abuse to them and pointed out the most abusive promoters. Ron Snyder had come along and had tweaked his plan based on informal IRS feedback making him optimistic that he would be successful in Tax Court.
What Can Be Abusive About These Plans?
In the extreme version a closely held corporation makes contributions to the plan. Rank and file employees do not get any benefits. The contributions are deducted by the corporation. The contributions go to fund whole dollar life insurance whose beneficiaries are designated by the principals. The principals are able to access the cash surrender value of the insurance contracts. The beneficiaries do not recognize any income.
Reply