IRS Code

Internal Revenue Code

                

Internal Revenue Code Section 79

Internal Revenue Code Section 79 Plans and Captive Insurance History

Many lawsuits against insurance businesses, such as Hartford, Pacific Life, Indianapolis Life, AIG, and Penn Mutual, to name just a couple of. Agents, accountants, and attorneys had been also successfully sued.

Lately, insurance companies, agents, accountants, and others have been selling captive insurance and Section 79 scams. The motivations are precisely the exact same. They push huge tax deductions for enterprise owners. There are also large commissions for salespeople, although this is usually mentioned only in passing, if at all.

Anyone participating in a listed or reportable transaction ought to effectively file Form 8886 or face big IRS fines. A listed transaction is any transaction specifically identified as such by published IRS guidance, or one substantially similar to that transaction.

“In my expertise, the desire to stay away from taxes is usually the principal and sometimes the only reason why folks participate in Section 79, captive insurance, or 419 plans. That is why I normally take the position that virtually everybody participating in 1 of these arrangements really should file Form 8886, if only protectively as a precaution,” says Wallach.

 Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a frequent speaker on retirement plans, abusive tax shelters, financial, international tax, and estate planning.  He writes about 412(i), 419, Section79, FBAR, and captive insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press and has been featured on television and radio financial talk shows including NBC, National Pubic Radio’s All Things Considered, and others. Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s Guide to Life Insurance and Federal Estate and Gift Taxation, as well as the AICPA best-selling books, including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxadvisorexpert.com.

                                                                                                                          

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other entity. You should contact an appropriate professional for any such advice.