FBAR/OVDI LANCE WALLACH: FBAR & International Tax Alert Report: The willful failure to file the FBAR report or retain records of your foreign accounts can potentially lead to a ten-year prison sentenc...
Sectoin 79 plans is that they basically force employers and those helping them set up Section 79 plans to lie to the employees when implementing the plan.
Non-discrimination
Section 79 plans are employee benefits plans. As such, employers are not supposed to discriminate in favor of key employees or business owners.
As you know, Section 79 plans are implemented so business owners can take a business deduction for the purchase of an individually owned life insurance policy that the owner can borrow from tax free in retirement.
It sounds great until you break down the math and understand that a client would be better off paying taxes on his/her money, taking it home, and funding a good cash value life policy rather than the low cash accumulation Section 79 Plan policy.
Notwithstanding the math behind Section 79 plans, let's talk about the benefits for employees. The employee owner is going to buy a "permanent" policy that will carry cash and can be borrowed from tax free in retirement.
That same policy must be offered to all employees. If that actually happened in a full-disclosure manner, virtually all the employees would opt for the same permanent policy; and if that happened, the finances of the plan would really go out the window because of the tremendous costs for the employees.
How do you "work around" this issue?
The work around of this issue is a bit clever and deceptive. The employees will be scared into voluntarily opting for $50,000 of term insurance instead of the full-benefit policy (term or permanent).
Why would an employee opt for $50,000 i
FBAR/OVDI LANCE WALLACH
ReplyDeleteFBAR Foreign Bank Account Reporting The IRS is assessing huge penalties for undisclosed foreign bank accounts, assets & income. Click for more info FBAR FILING DEADLING HAS BEEN EXTENDED
Thursday, December 5, 2013
FBAR & International Tax Alert Report
The willful failure to file the FBAR report or retain records of your foreign accounts can potentially lead to a ten-year prison sentence and fines of up to $500,000. This criminal penalty applies to all US citizens pursuant to 31U.S.C Section S322B and 31 C.F.R. Section 103.S.9.C It may also apply to persons living in the United States who are not citizens.
If you fail to answer the question truthfully on schedule B of your Form 1040 which asks if you “have an interest in or a signature or other authority over a financial account in a foreign country”, then your false statement might be deemed a criminal offense by the IRS per the sections mentioned above if other surrounding facts and circumstances apply.
Our office is headed by a former international tax IRS agent with 37 years experience as a CPA and Associate Professor of accounting. Call our office immediately for a free five-minute consultation so you can avoid the dire circumstances described above and deal with the other associated problems.