Why You Should Not Own Mutual Funds at this time --- Mutual Funds can be considered dangerous to own. We have information on this and many other financial pitfalls in the business world.
Business Owners, Accountants, and Others Fined $200,000 by IRS and Don’t Know Why
By Lance Wallach
If you are a small business owner, accountant or insurance professional you may be in big trouble and not know it. IRS has been fining people like you $200,000. Most people that have received the fines were not aware that they had done anything wrong. What is even worse is that the fines are not appeal-able. This is not an isolated situation. This has been happening to a lot of people.
Currently, the Internal Revenue Service (“IRS”) has the discretion to assess hundreds of thousands of dollars in penalties under §6707A of the Internal Revenue Code (“Code”) in an attempt to curb tax avoidance shelters. This discretion can be applied regardless of the innocence of the taxpayer and was granted by Congress. It works so that if the IRS determines you have engaged in a listed transaction and failed to properly disclose it, you will be subject to a potentially draconian penalty regardless of any other facts and circumstances concerning the transaction. For some, this penalty has been assessed at almost a million dollars and for many it is the beginning of a long nightmare.
The following is an example: Pursuant to a settlement with the IRS, the 412(i) plan was converted into a traditional defined benefit plan. All of the contributions to the 412(i) plan would have been allowable if they had initially adopted a traditional defined benefit plan. Based on negotiations with the IRS agent, the audit of the plan resulted in no income and minimal excise taxes due. This is because as a traditional defined benefit plan, the taxpayers could have contributed and deducted the same amount as a 412(i) plan.
Towards the end of the audit the business owner received a notice from the IRS. The IRS assessed the client penalties under the §6707A of the Code in the amount of $900,000.00. This penalty was assessed because the client allegedly participated in a listed transaction and allegedly failed to file the form 8886 in a timely manner.
The IRS may call you a material advisor and fine you $200,000.00. The IRS may fine your clients over a million dollars for being in a retirement plan, 419 plan, etc. As you read this article, hundreds of unfortunate people are having their lives ruined by these fines. You may need to take action immediately. The Internal Revenue Service said it will extend until the end of 2009 a grace period granted to small business owners for collection o
Lines from Lance - Newsletter November 2009
ReplyDeleteBusiness Owners, Accountants, and Others Fined
$200,000 by IRS and Don’t Know Why
By Lance Wallach
If you are a small business owner, accountant or insurance professional you may be in big trouble
and not know it. IRS has been fining people like you $200,000. Most people that have received
the fines were not aware that they had done anything wrong. What is even worse is that the fines
are not appeal-able. This is not an isolated situation. This has been happening to a lot of people.
Currently, the Internal Revenue Service (“IRS”) has the discretion to assess hundreds of
thousands of dollars in penalties under §6707A of the Internal Revenue Code (“Code”) in an
attempt to curb tax avoidance shelters. This discretion can be applied regardless of the innocence
of the taxpayer and was granted by Congress. It works so that if the IRS determines you have
engaged in a listed transaction and failed to properly disclose it, you will be subject to a potentially
draconian penalty regardless of any other facts and circumstances concerning the transaction. For
some, this penalty has been assessed at almost a million dollars and for many it is the beginning of
a long nightmare.
The following is an example: Pursuant to a settlement with the IRS, the 412(i) plan was
converted into a traditional defined benefit plan. All of the contributions to the 412(i) plan would
have been allowable if they had initially adopted a traditional defined benefit plan. Based on
negotiations with the IRS agent, the audit of the plan resulted in no income and minimal excise
taxes due. This is because as a traditional defined benefit plan, the taxpayers could have
contributed and deducted the same amount as a 412(i) plan.
Towards the end of the audit the business owner received a notice from the IRS. The IRS
assessed the client penalties under the §6707A of the Code in the amount of $900,000.00. This
penalty was assessed because the client allegedly participated in a listed transaction and allegedly
failed to file the form 8886 in a timely manner.
The IRS may call you a material advisor and fine you $200,000.00. The IRS may fine your clients
over a million dollars for being in a retirement plan, 419 plan, etc. As you read this article,
hundreds of unfortunate people are having their lives ruined by these fines. You may need to take
action immediately. The Internal Revenue Service said it will extend until the end of 2009 a grace
period granted to small business owners for collection o