that passing such legislation without proper debate, industry input, and fine tuning will have negative economic consequences while minimally impacting government income tax collections through the bills hidden tax increases. He asserts the 2015 Extender Bill as written fails to protect legitimate use of 831(b) electing insurance companies by successful closely held businesses across the country. “Today, section 831(b) is used by numerous small insurance companies to fill gaps in traditional coverage where large insurance companies have either completely left the marketplace, or charge so much in premiums that the purchase of such insurance is uneconomical. Many smaller businesses today would be completely exposed to such things as products liability claims, employee practices claims, environmental claims, and numerous other claims but for their coverage from 831(b) insurance companies.
IRS scrutiny of captive insurance gained substantial momentum in early 2014 as The Service launched a series of 6700 promoter examinations aimed at multiple captive management firms. In short order, these examinations led to informal documentation requests, and audits of captive insurance company owners nationwide. By 2015, The IRS listed captives on its Dirty Dozen List acknowledging that captives were legal when done properly, but including captive insurance among potential “tax scams,” along with identity theft, phishing, preparer fraud and offshore tax avoidance. Highly coordinated, the audits of captive clients tend to involve voluminous documentation requests which occasionally include IRS summons/enforcement proceedings requiring experienced legal counsel with familiarity both in terms of the captive owner’s documentation, and also with the documentation of the relevant service provider. The IRS commonly requests interviews, which can be recorded, and taken under oath with participation by IRS counsel.
IRS scrutiny of captive insurance gained substantial momentum in early 2014 as The Service launched a series of 6700 promoter examinations aimed at multiple captive management firms. In short order, these examinations led to informal documentation requests, and audits of captive insurance company owners nationwide. By 2015, The IRS listed captives on its Dirty Dozen List acknowledging that captives were legal when done properly, but including captive insurance among potential “tax scams,” along with identity theft, phishing, preparer fraud and offshore tax avoidance. Highly coordinated, the audits of captive clients tend to involve voluminous documentation requests which occasionally include IRS summons/enforcement proceedings requiring experienced legal counsel with familiarity both in terms of the captive owner’s documentation, and also with the documentation of the relevant service provider. The IRS commonly requests interviews, which can be recorded, and taken under oath with participation by IRS counsel.
microcaptives IRS audit risk Edit article Published on November 15, 2016 LikedUnlikemicrocaptives IRS audit risk1Comment2ShareShare microcaptives IRS audit risk1 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach A new law governing microcaptives is increasing the risk that the Internal Revenue Service will order an audit of the captive's parent company or the captive manager overseeing the company-owned insurer.
The use of the microcaptives, or those electing to be taxed under Section 831(b) of the U.S. Tax Code, has increased during the past five years, experts said.
The Protecting America from Tax Hikes Act of 2015, which was enacted last year, changed the limits and the rules governing those microcaptives.
Under the new law effective in 2017, 831(b) captives can avoid federal taxes on up to $2.2 million in annual premium income, which is up from the current limit of $1.2 million.
The higher limit is an opportunity for captive owners to place more risks in their captives, such as cyber; earthquake, wind and flood; pollution liability and cleanup; property mold; and difference in limits/difference in conditions risks, experts said during the Captive Insurance Companies Association's 2016 International Conference in Scottsdale, Arizona, earlier this month.
While the new law increases the premium income that is exempt from taxation, it also imposes stricter rules on the ownership structures of 831(b) captives, which are often used by family-run companies, to be eligible for that exemption.
“The IRS scrutinizes small captives very closely,
LikedUnlikemicrocaptives IRS audit riskCommentShareShare microcaptives IRS audit risk Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach 409 articles 2 commentsRecommended
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0s Lance Wallach Business Owner at National Offices of Lance Wallach captive insurance Edit article Published on November 27, 2016 LikedUnlikecaptive insurance1Comment1ShareShare captive insurance1 Lance Wallach… See more LikeReply 1w Lance Wallach Business Owner at National Offices of Lance Wallach A new law governing microcaptives is increasing the risk that the Internal Revenue Service will order an audit of the captive's parent company or the captive manager overseeing the company-owned insurer.
The use of the microcaptives, or those electing to be taxed under Section 831(b) of the U.S. Tax Code, has increased during the past five years, experts said.
The Protecting America from Tax Hikes Act of 2015, which was enacted last year, changed the limits and the rules governing those microcaptives.
Under the new law effective in 2017, 831(b) captives can avoid federal taxes on up to $2.2 million in annual premium income, which is up from the current limit of $1.2 million.
The higher limit is an opportunity for captive owners to place more risks in their captives, such as cyber; earthquake, wind and flood; pollution liability and cleanup; property mold; and difference in limits/difference in conditions risks, experts said during the Captive Insurance Companies Association's 2016 International Conference in Scottsdale, Arizona, earlier this month.
While the new law increases the premium income that is exempt from taxation, it also imposes stricter rules on the ownership structures of 831(b) captives, which are often used by family-run companies, to be eligible for that exemption.
captive insurance updates Edit article Published on November 16, 2016 LikedUnlikecaptive insurance updates1Comment3ShareShare captive insurance updates3 Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach captive insurance changes
Lance Wallach
Business Owner at National Offices of Lance Wallach
Businesses have long used captive insurance companies (captives) to manage insurable risks. A typical captive is owned by the business owners and insures the risks of the business. If properly structured and operated, captives can allow businesses to finance insurable risks through an alternative platform, consolidate their insurance purchases, and access the reinsurance market.
Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage" Names of People who SOLD: "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder Insurance Companies -- need to be 412 AND 419: Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
BY GREG GARDNER • FREE PRESS BUSINESS WRITER • APRIL 28, 2009
With ranks of active UAW workers shrinking and the pool of retirees growing, the union's decision to accept half of what General Motors and Chrysler owe to the retiree health care trust is putting the fund on shaky ground.
Called a Voluntary Employee Beneficiary Association, or VEBA, the trust fund was hailed as part of a transformational labor deal the UAW reached with Chrysler, Ford and General Motors in 2007.
The union would take responsibility for managing health care benefits for retirees. The automakers, meanwhile, would get to take a crushing cost off their books.
But to get it started, all three companies agreed to make huge initial payments -- GM had to pay $20 billion, while Chrysler's tab was $10.6 billion. Now, with the UAW's consent, each company will pay half those amounts. "I said a year ago it wasn't viable when the market was going up," said Lance Wallach, a consultant in New York. Now, he said the VEBA is even less feasible.
"Instead of the VEBA failing in 15 years, now it will fail in 6," Wallach said.
As GM announced plans to shed an additional 7,000 to 8,000 hourly jobs, the pool of people who may someday depend on the VEBA is swelling.
"Everyone is very concerned about losing their health care. That's what the union fought for," said Kandy O'Neill, 40, who works at GM's Orion Township assembly plant. Thousands of hourly workers won't have the luxury of retiring early. If their plants close, they may have to shop for new coverage.
Arthur Augustus, who has 31 years with GM, said he thinks about retiring all the time. "But I'm worried about my pension and my health insurance," he said as he left work at the Detroit-Hamtramck assembly plant Monday.
Mike Earl, who works at the Delta Township assembly plant near Lansing, said he's nervous, even though his plant is to run without any breaks through summer.
"There's going to be people all over the nation laid off with more seniority than me," he said. "I could lose my job." ______
that passing such legislation without proper debate, industry input, and fine tuning will have negative economic consequences while minimally impacting government income tax collections through the bills hidden tax increases. He asserts the 2015 Extender Bill as written fails to protect legitimate use of 831(b) electing insurance companies by successful closely held businesses across the country. “Today, section 831(b) is used by numerous small insurance companies to fill gaps in traditional coverage where large insurance companies have either completely left the marketplace, or charge so much in premiums that the purchase of such insurance is uneconomical. Many smaller businesses today would be completely exposed to such things as products liability claims, employee practices claims, environmental claims, and numerous other claims but for their coverage from 831(b) insurance companies.
ReplyDeleteIRS scrutiny of captive insurance gained substantial momentum in early 2014 as The Service launched a series of 6700 promoter examinations aimed at multiple captive management firms. In short order, these examinations led to informal documentation requests, and audits of captive insurance company owners nationwide. By 2015, The IRS listed captives on its Dirty Dozen List acknowledging that captives were legal when done properly, but including captive insurance among potential “tax scams,” along with identity theft, phishing, preparer fraud and offshore tax avoidance.
ReplyDeleteHighly coordinated, the audits of captive clients tend to involve voluminous documentation requests which occasionally include IRS summons/enforcement proceedings requiring experienced legal counsel with familiarity both in terms of the captive owner’s documentation, and also with the documentation of the relevant service provider. The IRS commonly requests interviews, which can be recorded, and taken under oath with participation by IRS counsel.
IRS scrutiny of captive insurance gained substantial momentum in early 2014 as The Service launched a series of 6700 promoter examinations aimed at multiple captive management firms. In short order, these examinations led to informal documentation requests, and audits of captive insurance company owners nationwide. By 2015, The IRS listed captives on its Dirty Dozen List acknowledging that captives were legal when done properly, but including captive insurance among potential “tax scams,” along with identity theft, phishing, preparer fraud and offshore tax avoidance.
ReplyDeleteHighly coordinated, the audits of captive clients tend to involve voluminous documentation requests which occasionally include IRS summons/enforcement proceedings requiring experienced legal counsel with familiarity both in terms of the captive owner’s documentation, and also with the documentation of the relevant service provider. The IRS commonly requests interviews, which can be recorded, and taken under oath with participation by IRS counsel.
microcaptives IRS audit risk
ReplyDeleteEdit article
Published on November 15, 2016
LikedUnlikemicrocaptives IRS audit risk1Comment2ShareShare microcaptives IRS audit risk1
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
A new law governing microcaptives is increasing the risk that the Internal Revenue Service will order an audit of the captive's parent company or the captive manager overseeing the company-owned insurer.
The use of the microcaptives, or those electing to be taxed under Section 831(b) of the U.S. Tax Code, has increased during the past five years, experts said.
The Protecting America from Tax Hikes Act of 2015, which was enacted last year, changed the limits and the rules governing those microcaptives.
Under the new law effective in 2017, 831(b) captives can avoid federal taxes on up to $2.2 million in annual premium income, which is up from the current limit of $1.2 million.
The higher limit is an opportunity for captive owners to place more risks in their captives, such as cyber; earthquake, wind and flood; pollution liability and cleanup; property mold; and difference in limits/difference in conditions risks, experts said during the Captive Insurance Companies Association's 2016 International Conference in Scottsdale, Arizona, earlier this month.
While the new law increases the premium income that is exempt from taxation, it also imposes stricter rules on the ownership structures of 831(b) captives, which are often used by family-run companies, to be eligible for that exemption.
“The IRS scrutinizes small captives very closely,
LikedUnlikemicrocaptives IRS audit riskCommentShareShare microcaptives IRS audit risk
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
409 articles
2 commentsRecommended
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0s
Lance Wallach
Business Owner at National Offices of Lance Wallach
captive insurance
Edit article
Published on November 27, 2016
LikedUnlikecaptive insurance1Comment1ShareShare captive insurance1
Lance Wallach… See more
LikeReply
1w
Lance Wallach
Business Owner at National Offices of Lance Wallach
A new law governing microcaptives is increasing the risk that the Internal Revenue Service will order an audit of the captive's parent company or the captive manager overseeing the company-owned insurer.
The use of the microcaptives, or those electing to be taxed under Section 831(b) of the U.S. Tax Code, has increased during the past five years, experts said.
The Protecting America from Tax Hikes Act of 2015, which was enacted last year, changed the limits and the rules governing those microcaptives.
Under the new law effective in 2017, 831(b) captives can avoid federal taxes on up to $2.2 million in annual premium income, which is up from the current limit of $1.2 million.
The higher limit is an opportunity for captive owners to place more risks in their captives, such as cyber; earthquake, wind and flood; pollution liability and cleanup; property mold; and difference in limits/difference in conditions risks, experts said during the Captive Insurance Companies Association's 2016 International Conference in Scottsdale, Arizona, earlier this month.
While the new law increases the premium income that is exempt from taxation, it also imposes stricter rules on the ownership structures of 831(b) captives, which are often used by family-run companies, to be eligible for that exemption.
captive insurance updates
ReplyDeleteEdit article
Published on November 16, 2016
LikedUnlikecaptive insurance updates1Comment3ShareShare captive insurance updates3
Lance Wallach
Lance Wallach
Business Owner at National Offices of Lance Wallach
captive insurance changes
Lance Wallach
Business Owner at National Offices of Lance Wallach
Businesses have long used captive insurance companies (captives) to manage insurable risks. A typical captive is owned by the business owners and insures the risks of the business. If properly structured and operated, captives can allow businesses to finance insurable risks through an alternative platform, consolidate their insurance purchases, and access the reinsurance market.
Trust,Beta 419,Millennium Plan,Bisys,Creative Services Group,Sterling Benefit Plan,Compass 419,Niche 419,CRESP,Sea Nine Veba, American Benefits Trust, National Benefit Plan and Trust, ABT, Professional Benefits Trust Benistar 419 Plan, nova trust, Grist mill trust, Sadi Trust IRS raids, Millennium 419 Plan,Bisys 419,Creative Services Group 419 Plan,Sterling Benefit 419 Plan,CRESP 419,Sea Nine Veba 419, National Benefit Plan and Trust 419, American Benefits Trust 419,ABT 419,Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life "Grist Mill Trust" "Real Veba""Section 79 GEAR" GEAR" "United Financial Group" "Kenny Hartstein" "Millennium Plan" Kenny Hartstein" "Millennium Plan" "Tom Crosswhite" "Greg Roper""captive insurance" cresp "Ridge Plan" "Professional benefits Trust" "PBT " "Professional Planning Associates" "National Pension Associate" "NPA""Heritage Plan" ""Insurance fraud""pension and benefit plan fraud""insurance company fraud""ECI Pension Services""Pension Professionals of America""ABI""Hartford""AIG""Indy Life""Indianapolis Life""Advantage" Names of People who SOLD: "Kenny Hartstein""Dennis Cunning""Steve Toth""Michael Sonnenberg"Larry Bell""Scott Ridge""Randall Smith""Greg Roper""Tracy Sunderlage""Warren Trust""Joseph Donnelly""Norm Bevan""Judy Carsrud""Dan Carpenter""Ed Waesche" "Tom Crosswhite""David Struckman""George Huff" "Tom Crosswhite" "Greg Roper""Christopher Jarvis" David Mandell" Gen Von Oder Insurance Companies -- need to be 412 AND 419: Hartford 419, Pacific Life 419, PAC Life 419, AVIVA, 419, Indianpolis Life, Penn Mutual419,Bankers Life 419, John Hancock 419, Security Mutual 419, Transamerica 419,Prudential 419, Kansas City Life 419, Mass Mutual419, Guardian 419, Amerus 419, Wells Fargo 419, Fifth Third Bank 419, Arrow Head Trust 419, U.S. Benefits Group, Benefit Plan Advisors, Rex Insurance Service,Advantage,AIG, Old Mutual, Allmerica Financial, American Heritage Life, Commercial Union Life, National Life of Vermont, Old Line Life, Security Mutual Life, West Coast Life
ReplyDeleteUnion agrees to take half from Detroit 3
ReplyDeleteBY GREG GARDNER • FREE PRESS BUSINESS WRITER • APRIL 28, 2009
With ranks of active UAW workers shrinking and the pool
of retirees growing, the union's decision to accept half of
what General Motors and Chrysler owe to the retiree
health care trust is putting the fund on shaky ground.
Called a Voluntary Employee Beneficiary Association, or
VEBA, the trust fund was hailed as part of a
transformational labor deal the UAW reached with
Chrysler, Ford and General Motors in 2007.
The union would take responsibility for managing health
care benefits for retirees. The automakers, meanwhile,
would get to take a crushing cost off their books.
But to get it started, all three companies agreed to make
huge initial payments -- GM had to pay $20 billion, while
Chrysler's tab was $10.6 billion. Now, with the UAW's
consent, each company will pay half those amounts. "I
said a year ago it wasn't viable when the market was
going up," said Lance Wallach, a consultant in New York.
Now, he said the VEBA is even less feasible.
"Instead of the VEBA failing in 15 years, now it will fail in
6," Wallach said.
As GM announced plans to shed an additional 7,000 to
8,000 hourly jobs, the pool of people who may someday
depend on the VEBA is swelling.
"Everyone is very concerned about losing their health
care. That's what the union fought for," said Kandy
O'Neill, 40, who works at GM's Orion Township assembly
plant. Thousands of hourly workers won't have the luxury
of retiring early. If their plants close, they may have to
shop for new coverage.
Arthur Augustus, who has 31 years with GM, said he
thinks about retiring all the time. "But I'm worried about my
pension and my health insurance," he said as he left work
at the Detroit-Hamtramck assembly plant Monday.
Mike Earl, who works at the Delta Township assembly
plant near Lansing, said he's nervous, even though his
plant is to run without any breaks through summer.
"There's going to be people all over the nation laid off
with more seniority than me," he said. "I could lose my
job."
______