IRS Fines Unsuspecting Business Owner Millions

By: Lance Wallach

The following is an actual email:

Date: Mon, 14 Jun 2010
Subject: Section 6707A Problem

Lance,

Unfortunately, your prediction has come true regarding (name withheld).  He has received a letter dated June 5, 2010 stating that the IRS intends to asset the horrendous penalty, but will wait to see if the legislation pending on amending Section 6707A is passed.

What are your thoughts?

(name withheld)

Principal

(National Law Firm)

*End of email

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The Moratorium on Fines Has Ended; The IRS Has Started Sending Fine Notices to Participants

Past or Present Participants Face Very Large IRS Fines

Accountants will be Fined $100,000 or More, Business Owners $300,000 and Up

You were in a 419 and/or 412i welfare benefit plan and either did not file or filed improperly.  Accountants or other advisors will probably be fined as material advisors.  This means that you are subject to a large fine. Once you get the large fine, the IRS claims the fine is not subject to an appeal.

You should have filed protectively for every year your entity participated in this type of plan.  For every year after 2003, the penalty for not properly filing is $200,000 a year for business entities and $100,000 a year for individuals.  It is possible an employer that participated in this type of plan since 2004 could be subject to over one million dollars in penalties solely as a result of the failure to file.  For all years in the plan, the Statute of Limitations will not begin to run until after the form is properly filed.  In addition, certain individual plan participants should also file for every year of plan participation.  None of this has anything to do with any audit that you may currently be involved in or may previously have experienced.

Accountants will be fined up to $200,000 as material advisors.

You may still have time to remedy these types of 419 or 412i welfare benefit plans before the IRS comes calling.  It is important to act immediately because these fines are now in the process of being issued by the IRS. Have an expert review your plan now.

For more information, visit www.irsdog.com or www.taxaudit419.com

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Lance Wallach, CLU, ChFC, the National Society of Accountants Speaker of the Year, also writes about retirement plans, 412(i) plans, and 419 plans. He speaks at more than ten conventions annually, writes for over fifty publications, and is quoted regularly in the press. He has authored numerous books for the AICPA, Bisk TotalTape, Wiley and others. Mr. Wallach does Expert Witness work and has never lost a case. His knowledge of business finance and taxation has saved his clients hundreds of thousands of dollars from the IRS.

The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity.  You should contact an appropriate professional for any such advice. I am not the plan administrator and I have nothing to do with the plan.

About the Author

Lance Wallach , 412i and 419 plan expert, is one of the nation's leading authorities on resolving IRS tax problems for individuals and businesses. His team of former IRS agents, CPAs, and tax attorneys have saves his clients hundreds of thousands of dollars from the IRS.

Mr. Wallach is a member of the AICPA faculty of teaching professionals, the National Society of Accountants' Speaker of the Year, and he is a renowned national expert witness in many tax court cases. To date his side has never lost a case.

Mr. Wallach is often a featured speaker at national conventions for CPAs, attorneys and industry associations, and has over 30 years experience helping people get the most money back from the IRS.

Lance Wallach is the author of many best selling accounting, taxation, and law books, including:

• Protecting Clients from Fraud, Incompetence, and Scams

• Wealth Preservation Planning by the National Society of Accountants

• The CPA's Guide to Federal and Estate Gift Taxation published by Bisk

• The AICPA's The Team Approach to Tax, Financial and Estate Planning

• The CPA's Guide to Life Insurance by Bisk CPEasy

• Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots by the AICPA, author / moderator Lance Wallach

(ArticlesBase SC #2641244)

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