We have closely followed the many legal cases surrounding Nikolai Battoo and Tracy Sunderlage. Together they, and entities controlled or involved with them, have cost investors hundreds of millions of dollars. Our clients alone have lost many millions. A sampling of the entities connected with the two men or engaged in similar activities include PIWM, […]
Cell Captive Insurance – Legit Insurance Tool or Abusive Tax Shelter
Just a few years ago, captive insurance companies were a hot news item in the arcane world of abusive tax shelters. Sleazy promoters were signing up small businesses in droves. If you created a cell captive as a property and casualty loss management tool, it’s probably legitimate. If you “bought” an off the shelf captive […]
Abusive Tax Shelter Results In $100 Million Assessment (IRS Whistleblower Post)
None of us enjoy receiving letters from the IRS. Some might argue and claim a refund is a nice thing to receive from the IRS but those checks come from the U.S. Treasury. While often a letter from the IRS signals an audit or notice saying that you owe more money, former HP board member […]
Pension Plan Administrator Convicted Of Fraud (Employee Benefit Plan Scam)
by Brian Mahany Tens of millions of Americans invest for the future through employer sponsored 401(k) and other employee benefit plans. These plans allow workers to lower their taxes and provide retirement income. Depending on how the money is invested, there is always a risk of loss. In the case of Matthew Hutcheson, an Idaho […]
Time Running Out For Holders Of 419 Welfare Benefit Plans
[Post updated through 2021] More than a decade ago, so called welfare benefit plans were the rage for small business owners. Insurance agents, financial planners and even tax attorneys were all out hustling clients to invest heavily in these plans. According to the promoters, business owners could contribute and sock away hundreds of thousands of […]
Don’t Become A Material Advisor – What You Need to Know About Abusive Tax Shelters
[Updated through 2021][Ed. Note – the following guest post is by Lance Wallach. The post originally appeared in Accounting Today on July 1st of this year and is being reprinted here at the request of its author. In his post, Lance details the dangers faced by accountants and others who prepare returns that involve abusive […]
Uncle Sam Goes After Another Welfare Benefit Plan Scheme
by Brian Mahany The IRS and U.S. Department Justice Department have a special relationship with welfare benefit plan promoters and the brokers and insurance agents that sell them. They hate them. For over a decade, the IRS has declared that many welfare benefit plans are fraudulent and abusive tax shelters. Many of the promoters are […]
U.S. Tax Court Disallows 419A Plan, Upholds Penalties
In a recent U.S. Tax Court case, taxpayers suffered a double loss. The taxpayers, consisting of four couples, had purchased welfare benefit plans marketed by Benistar 419 Plan Services. Under the plan, Benistar provided preretirement life insurance to select employees of companies enrolled in the plan. Small employers like the plans because they allow pretax […]
Three Types of Welfare Benefit Plan Frauds
[Post updated May 2021] When this post was first written in 2011, welfare benefit plans were a hot topic with the IRS. Huge penalties – up to $200,000 per year, criminal investigations, civil suits and many, many scams. If getting huge fines from the IRS wasn’t enough, several promoters of these plans managed to get […]