by Brian Mahany With just 2 weeks before taxes are due, the IRS has cranked up their publicity machine. Indictments, public service announcements and lots of information. One of the more interesting stories is the IRS “dirty dozen” tax scams. While identity theft occupies the number 1 spot again, several “scams” warrant special mention. Near […]
US Tax Court Disallows Xėlan 419 Plan
At least once a month we receive a call from a business owner or physician who lost money in a 419 plan. The “lucky” simply have made a lousy investment in some unneeded insurance. The unlucky receive a huge tax bill from the IRS and / or lost their money in some sort of investment […]
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 […]
Battle of the Titans
by Brian Mahany We hear of many people making claims against their tax preparers for not properly advising them of their foreign account reporting requirements. Lately some taxpayers are suing Swiss banks for allegedly providing them bad advise – like, “don’t worry you won’t get caught.” Now in what may be the ultimate lawsuit, billionaire […]
$25 Billion Mortgage Foreclosure Settlement May Backfire
by Brian Mahany When the five largest lenders signed a deal with the states and agreed to “pay” $25 billion to help homeowners keep their houses, there was singing in the streets. The states’ attorney generals hailed the agreement as a stunning victory for homeowners. Banks seized the opportunity to try and buy back some […]
New Directive Says IRS Can Seek Metadata
An Information Letter Memorandum issued by the Chief Counsel of the IRS (ILM 201146017) says the IRS can summons metadata from taxpayers. Just about everything we do on a computer carries a trail of metadata. This stored information tells how data was formatted, modified and created. For those not familiar with metadata, we take our […]
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 […]