By Lance Wallach
Here it is. Here is proof of my predictions. Perhaps you didn’t believe me when I told you the IRS was coming after what it has deemed
“abusive transactions,” but here it is, right from the IRS’s own job posting. If you were involved with a 419e, 412i, listed transaction,
abusive tax shelter, Section 79, or captive, and you haven’t yet approached an expert for help with your situation, you had better do it now,
before the notices start piling up on your desk.
"captive insurance" "419e" "412i" "Section79" "6707A""abusive transactions" "abusive tax shelter" "Benistar" "Niche" "sea nine veba" "Grist Mill Trust" "Millenium Trust" "8886 form"
A Portion of The exact announcement from the Department of the Treasury:
Job Title: INTERNAL REVENUE AGENT (ABUSIVE TRANSACTIONS GROUP)
Agency: Internal Revenue Service
Open Period: Monday, October 18, 2010 to Monday, November 01, 2012
Sub Agency: Internal Revenue Service
Job Announcement Number: 11PH1-SBB0058-0512-12/13
Who May Be Considered:
IRS employees on Career or Career Conditional Appointments in the competitive service
Treasury Office of Chief Counsel employees on Career or Career Conditional Appointments or with prior competitive status
IRS employees on Term Appointments with potential conversion to a Career or Career Conditional Appointment in the same line of work
According to the job description, the agents of the Abusive Transactions Group will be conducting examinations of individuals, sole
proprietorships, small corporations, partnerships and fiduciaries. They will be examining tax returns and will “determine the correct tax
liability, and identify situations with potential for understated taxes.”
These agents will work in the Small Business/Self Employed Business Division (SB/SE) which provides examinations for about 7 million
small businesses and upwards of 33 million self-employed and supplemental income taxpayers. This group specifically goes after taxpayers
who generally have higher incomes than most taxpayers, need to file more tax forms, and generally need to rely more on paid tax preparers.”
Their examinations can contain “special audit features or anticipated accounting, tax law, or investigative issues,” and look to make sure that,
for example, specialty returns are filed properly.
The fines are severe. Under IRC 6707A, fines are up to $200,000 annually for not properly disclosing participation in a listed transaction.
There was a moratorium on those fines until June 2010, pending new legislation to reduce them, but the new law virtually guarantees you will
be fined. The fines had been $200,000 per year on the corporate level and $100,000 per year on the personal level. You got the fine even if
you made no contributions for the year. All you had to do was to be in the plan and fail to properly disclose your participation.
You can possibly still avoid all this by properly filing Form 8886 IMMEDIATELY with the IRS. Time is especially of the essence now. You
MUST file before you are assessed the penalty. For months the Service has been holding off on actually collecting from people that they
assessed because they did not know what Congress was going to do. But now they do know, so they are going to move aggressively to
collection with people they have already assessed. There is no reason not to now. This is especially true because the new legislation still does
not provide for a right of appeal or judicial review. The Service is still judge, jury, and executioner. Its word is absolute as far as determining
what is a listed transaction.
So you have to file Form 8886 fast, but you also have to file it properly. The Service treats forms that are incorrectly filed as if they were
never filed. You get fined for filing incorrectly, or for not filing at all. The Statute of Limitations does not begin unless you properly file. That
means IRS can come back to get you any time in the future unless you file properly.
If you don’t want these new IRS Agents, or any other IRS agents for that matter, to be earning their paychecks by coming after you, make
sure you have done all you can to ensure that you have filed properly by reaching out for expert help today.
Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a
frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He writes about 412(i), 419, and captive
insurance plans. He gives expert witness testimony and his side has never lost a case. Contact him at 516.938.5007, firstname.lastname@example.org
or visit www.taxadvisorexperts.org or www.taxaudit419.com.
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
|IRS Is Hiring More Agents in its Abusive Transactions Group.
Are You Ready?