Showing posts with label IRS issues. Show all posts
Showing posts with label IRS issues. Show all posts
IRS Issues Final Regulations for Material Advisors, Accountants, Attorneys and Insurance Agents - HG.org
IRS Issues Final Regulations for Material Advisors, Accountants, Attorneys and Insurance Agents - HG.org
If you sold, advised on or had anything to do with a listed transaction you will be fined by the IRS. For those that bought listed transactions like, 419 welfare benefit plans or 412i plans, you have been or will also be fined.
On July 30, 2014, the Internal Revenue Service issued final regulations regarding the imposition of penalties under Internal Revenue Code section 6707 against material advisors who fail to file true, complete or timely disclosure returns with respect to reportable or listed transactions. The effective date of the final regulations is July 31, 2014.
IRS tax relief firm, Lance Wallach, speaking: How to Avoid IRS Fines for You and Your Clients
Something Like this Can Happen to You
Several years ago at the advice of an accountant or investment advisor a client adopts a defined benefit plan for her business. She did so because she had been advised that under this type of plan she could contribute tax deductible contributions far greater than the limits permitted under a defined contribution plan. Each year she funds the maximum that the IRS permitted based on a report from her actuary. The plan investment returns have been very good.
She is now ready to sell her business or retire and informs her advisors that she wants to close out the plan and transfer the money over into her Individual Retirement Account. The advisors come back with the following news. The plan is overfunded and some of the funds cannot be rolled over to an IRA. Those funds that are ineligible for a rollover must return to the company as taxable income and the IRS will in addition, levy a non-tax deductible penalty of at least 20%.
What happened?
She has done nothing along the way that the IRS could challenge. What happened was a combination of several things.
What happened?
She has done nothing along the way that the IRS could challenge. What happened was a combination of several things.
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