401k problems, lance wallach, irs audits

401k problems, lance wallach, irs audits

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  1. Abusive Tax Shelters: Abusive tax structures including trusts and syndicated conservation easements are sometimes used to avoid paying taxes. The IRS
    Published on February 19, 2020
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    Speaker, author expert witness at VEBA LLC
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    Abusive Tax Shelters: Abusive tax structures including trusts and syndicated conservation easements are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2019-47)Abusive Tax Shelters: Abusive tax structures including trusts and syndicated conservation easements are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2019-47)

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  2. The US Tax Court has held in a case involving a ‘microcaptive’ insurance company that the arrangement between the captive insurer and its policyholders did not qualify as insurance for tax purposes (Syzygy Insurance Co., Inc. v. Commissioner, T.C. Memo 2019-34). As a result, the insurer’s Section 831(b) election was invalid and amounts received by the taxpayer as premiums were recognized as income. Further, premium payments and any fees paid under the arrangement were not deductible by the insureds as either payments for insurance or as payments for other ordinary and necessary expenses.

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  3. The US Tax Court has held in a case involving a ‘microcaptive’ insurance company that the arrangement between the captive insurer and its policyholders did not qualify as insurance for tax purposes (Syzygy Insurance Co., Inc. v. Commissioner, T.C. Memo 2019-34). As a result, the insurer’s Section 831(b) election was invalid and amounts received by the taxpayer as premiums were recognized as income. Further, premium payments and any fees paid under the arrangement were not deductible by the insureds as either payments for insurance or as payments for other ordinary and necessary expenses.

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