Material Advisors and 419 Plans Litigation -
IRS Audit Experts for abusive insurance based plans deemed reportable or listed transactions by the IRS
Lance Wallach Life InsuranceMonday, March 25, 2013Life Insurance Policy Gone WrongProtecting Clients From Fraud, Incompetence, and ScamsBy: Lance WallachPublished by John Wiley and Sons, Inc.Excerpts have been taken from this book about:Bruce Hink, who has given me permission to utilize his name and circumstances, is a perfect example of what the IRS is doing to unsuspecting business owners. What follows is a story about Bruce Hink and how the IRS fined him $200,000 a year for being in what they called a “listed transaction”. In addition, I believe that the accountant who signed the tax return and the insurance agent who sold the retirement plan will each be fined $200,000 as material advisors. We have received a large number of calls for help from accountants, business owners, and insurance agents in similar situations. Don’t think this will happen to you. It is happening to a lot of accountants and business owners, because most of these so-called listed, abusive plans, or plans substantially similar to the so-called listed, are currently being sold by most insurance agents. Bruce was a small business owner facing $400,000 in IRS penalties for 2004 and 2005 for his 412(i) plan (IRC6707A). Here is how the story developed.