INCOME TAX Notice 2016–66 Notice 2016–66 This notice identifies certain “micro-captive transactions” and substantially similar transactions as transactions of interest for purposes of § 1.6011–4(b)(6) of the Income Tax Regulations and §§ 6111 and 6112 of the Internal Revenue Code. This notice also alerts persons involved in such transactions to certain responsibilities and penalties that may arise from their involvement with these transactions.
INCOME TAX Notice 2016–66 Notice 2016–66 This notice identifies certain “micro-captive transactions” and substantially similar transactions as transactions of interest for purposes of § 1.6011–4(b)(6) of the Income Tax Regulations and §§ 6111 and 6112 of the Internal Revenue Code. This notice also alerts persons involved in such transactions to certain responsibilities and penalties that may arise from their involvement with these transactions.
(a) General rule. Under § 1.6011–4(d) and the Instructions to Form 8886, Reportable Transaction Disclosure Statement, the required disclosure must identify and describe the transaction in sufficient detail for the IRS to be able to understand the tax structure of the reportable transaction and the identity of all parties involved in the transaction.
(b) Information required of all participants. For all participants, describing the transaction in sufficient detail includes, but is not limited to, describing on Form 8886 when and how the taxpayer became aware of the transaction.
(c) Information required of Captive. For Captive, describing the transaction in sufficient detail includes, but is not limited to, describing the following on Form 8886:
(1) whether Captive is reporting because (i) the amount of the liabilities incurred by Captive for insured losses and claim administration expenses during the Computation Period is less than 70 percent of the amount specified in section 2.01(e)(1) of this notice; (ii) Captive has at any time during the Computation Period made available as financing or otherwise conveyed or agreed to make available or convey any portion of the payments under the Contract to A, Insured, or a person related (within the meaning of § 267(b) or 707(b)) to A or Insured through a separate transaction, such as a guarantee, a loan, or other transfer; or (iii) both (i) and (ii); (2) under what authority Captive is chartered; (3) a description of all the type(s) of coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years); (4) a description of how the amounts treated as premiums for coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years) were determined, including the name and contact information of any actuary or underwriter who assisted in these determinations; (5) a description of any claims paid by Captive during the year or years of participation (if disclosure pertains to multiple years), and of the amount of, and reason for, any reserves reported by Captive on the annual statement; and (6) a description of the assets held by Captive during the year or years of participation (if disclosure pertains to multiple years); that is, the use Captive has made of its premium and investment income, including but not limited to, securities (whether or not registered), loans, real estate, or partnerships or other joint ventures, and an identification of the related parties involved in any transactions with respect to those assets. .06 Penalties Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to the penalty under § 6707A. Persons required to disclose these transactions under § 6111 who fail to do so may be subject to the penalty under § 6707(a). Persons required to maintain lists of advisees under § 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) may be subject to the penalty under § 6708(a). In addition, the IRS may impose other penalties on parties involved in these transactions, including the accuracy-related penalty under § 6662 or § 6662A.
SECTION 4. REQUEST FOR COMMENTS The Treasury Department and the IRS request comments on how the transaction might be addressed in published guidance.
Comments should be submitted in writing on or before January 30, 2017. Send submissions to CC:PA:LPD:PR (Notice 2016–66), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2016–66), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Comments may also be sent electronically, via the following e-mail address: Notice.comments@irscounsel.treas.gov. Please include “Notice 2016–66” in the subject line of any electronic communications. All comments submitted will be available for public inspection and copying.
VEBA PLAN LLC leverages its years of experience with protecting taxpayers to help its clients navigate the complex world of captive insurance compliance, with its team of former high-ranking IRS executives, key congressional personnel and experienced litigators ensuring that each client has the strongest defense possible in the event of an audit.Doing What's Best For You Or Your ClientWhether You Are A CPA...If your client has a captive, you need to evaluate whether they are compliant or not. The IRS is looking at business owners with captives, as well as the CPAs and financial advisors that serve them.Let us help you and your client.Or A Business Owner...It doesn’t matter if you’re under audit or not, making sure your captive is compliant should be top priority.alliantNational can help lower the risk of the IRS cracking down on your insurance arrangement, and will dramatically improve your case against the agency if you are audited.What Is A Captive Insurance Company?Insurance costs can be a big problem for successful companies. Oftentimes a company may find that third party insurance is commercially unavailable or the commercial insurance that is available may be overly expensive. A company can put up its own capital to form a wholly owned subsidiary insurance company to solve these problems. These types of subsidiaries are known as captive insurance companies.Captive insurance companies can not only fill in gaps in existing coverage but they also provide deductibles on existing coverage. Contributions to the captive insurance company can also be tax deductions under Internal Revenue Code section 831(b). Captive insurance companies also provide pricing stability and program control. Small Captives are on the IRS hit list and are being audited. Want to fight IRS and get all your money back from the promoter who sold you the abusive Captive. As an expert witness Lance Wallach has never lost a case. His partners have decades of experience working for the IRS and as tax professors.
abusive micro-captive insurance shelters and abusive syndicated conservation easements Published on March 13, 2020 Edit article View stats call firstStatus is online call first Speaker, author expert witness at VEBA LLC 218 articles The Internal Revenue Service today warned taxpayers to steer clear of abusive tax avoidance schemes and the unscrupulous individuals who promote them. Three variations of these schemes – abusive trusts, abusive micro-captive insurance shelters and abusive syndicated conservation easements -- are featured in the final installment of this year's "Dirty Dozen."
Taxpayers are reminded that those who participate in illegal schemes may face prosecution, civil litigation and ultimately having to pay all taxes owed along with stiff penalties and interest. Participants who utilize such schemes for tax evasion also risk imprisonment.
The three schemes described in today's release all start with a legitimate tax-planning tool that is improperly distorted almost always by a promoter to produce benefits that are too good to be true and ultimately seriously compromise the taxpayer. Taxpayers should be highly skeptical of such claims.
Abusive tax evasion schemes involving trusts Changes in bank secrecy laws of foreign jurisdictions have revealed a plethora of foreign tax evasion schemes involving trusts, and the IRS is actively examining these cases, as well as a variety of tax evasion schemes involving the use of domestic trusts.
Abusive trust arrangements often use multiple layers of trusts as well as offshore shell corporations and entities that are disregarded for U.S. tax purposes to attempt to hide the true ownership of assets and income or to disguise the substance of transactions. Although these schemes give the appearance of separating responsibility and control from the benefits of ownership, such as through the use of purported mortgages or rental agreements, false invoices, fees for services never performed, purchase and sale agreements and distributions, the taxpayer in fact continues to control the structures and directs any benefits received from them.
Taxpayers should be aware that abusive tax evasion arrangements involving trusts will not produce the tax benefits advertised by their promoters. U.S. taxpayers engaged in transactions with foreign trusts may be subject to significant information reporting penalties for failure to file Forms 3520/3520A, as applicable. For more on penalties, see Abusive Trust Tax Evasion Schemes - Law and Arguments (Section VII) on IRS.gov.
Form 14242, Report Suspected Abusive Tax Promotions or Preparers (PDF), contains a questionnaire that should be used to record informant contacts and to facilitate referrals to t. For more see DOJ Press Release 18-1672.
The Internal Revenue Service is urging taxpayers involved in syndicated conservation easement transactions to consult with their tax advisors followin Published on March 13, 2020 Edit article View stats call firstStatus is online call first Speaker, author expert witness at VEBA LLC 219 articles The Internal Revenue Service is urging taxpayers involved in syndicated conservation easement transactions to consult with their tax advisors following a recent U.S. Tax Court decision. The IRS also plans to continue aggressive enforcement efforts in this area. In late 2016, the Internal Revenue Service designated certain syndicated conservation easement arrangements as “listed transactions” in Notice 2017-10 (PDF).
On December 13, 2019, the U.S. Tax Court entered its first decision on a syndicated conservation easement transaction. In TOT Property Holdings, LLC v. Commissioner, Docket No. 005600-17, the Tax Court sustained in its entirety the IRS’s determination that all tax benefits from a syndicated conservation easement transaction should be denied and that the 40% gross valuation misstatement and negligence penalties applied. The Tax Court found that the transaction failed the legal requirements app
INCOME TAX
ReplyDeleteNotice 2016–66 Notice 2016–66
This notice identifies certain “micro-captive transactions” and substantially similar transactions as transactions of interest for purposes of § 1.6011–4(b)(6) of the Income Tax Regulations and §§ 6111 and 6112 of the Internal Revenue Code. This notice also alerts persons involved in such transactions to certain responsibilities and penalties that may arise from their involvement with these transactions.
INCOME TAX
ReplyDeleteNotice 2016–66 Notice 2016–66
This notice identifies certain “micro-captive transactions” and substantially similar transactions as transactions of interest for purposes of § 1.6011–4(b)(6) of the Income Tax Regulations and §§ 6111 and 6112 of the Internal Revenue Code. This notice also alerts persons involved in such transactions to certain responsibilities and penalties that may arise from their involvement with these transactions.
(a) General rule. Under § 1.6011–4(d) and the Instructions to Form 8886, Reportable Transaction Disclosure Statement, the required disclosure must identify and describe the transaction in sufficient detail for the IRS to be able to understand the tax structure of the reportable transaction and the identity of all parties involved in the transaction.
ReplyDelete(b) Information required of all participants. For all participants, describing the transaction in sufficient detail includes, but is not limited to, describing on Form 8886 when and how the taxpayer became aware of the transaction.
(c) Information required of Captive. For Captive, describing the transaction in sufficient detail includes, but is not limited to, describing the following on Form 8886:
(1) whether Captive is reporting because (i) the amount of the liabilities incurred by Captive for insured losses and claim administration expenses during the Computation Period is less than 70 percent of the amount specified in section 2.01(e)(1) of this notice; (ii) Captive has at any time during the Computation Period made available as financing or otherwise conveyed or agreed to make available or convey any portion of the payments under the Contract to A, Insured, or a person related (within the meaning of § 267(b) or 707(b)) to A or Insured through a separate transaction, such as a guarantee, a loan, or other transfer; or (iii) both (i) and (ii);
(2) under what authority Captive is chartered;
(3) a description of all the type(s) of coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years);
(4) a description of how the amounts treated as premiums for coverage provided by Captive during the year or years of participation (if disclosure pertains to multiple years) were determined, including the name and contact information of any actuary or underwriter who assisted in these determinations;
(5) a description of any claims paid by Captive during the year or years of participation (if disclosure pertains to multiple years), and of the amount of, and reason for, any reserves reported by Captive on the annual statement; and
(6) a description of the assets held by Captive during the year or years of participation (if disclosure pertains to multiple years); that is, the use Captive has made of its premium and investment income, including but not limited to, securities (whether or not registered), loans, real estate, or partnerships or other joint ventures, and an identification of the related parties involved in any transactions with respect to those assets.
.06 Penalties
Persons required to disclose these transactions under § 1.6011–4 who fail to do so may be subject to the penalty under § 6707A. Persons required to disclose these transactions under § 6111 who fail to do so may be subject to the penalty under § 6707(a). Persons required to maintain lists of advisees under § 6112 who fail to do so (or who fail to provide such lists when requested by the IRS) may be subject to the penalty under § 6708(a). In addition, the IRS may impose other penalties on parties involved in these transactions, including the accuracy-related penalty under § 6662 or § 6662A.
SECTION 4. REQUEST FOR COMMENTS
The Treasury Department and the IRS request comments on how the transaction might be addressed in published guidance.
Comments should be submitted in writing on or before January 30, 2017. Send submissions to CC:PA:LPD:PR (Notice 2016–66), Room 5203, Internal Revenue Service, P.O. Box 7604, Ben Franklin Station, Washington, DC 20044. Submissions may be hand-delivered Monday through Friday between the hours of 8 a.m. and 4 p.m. to CC:PA:LPD:PR (Notice 2016–66), Courier’s Desk, Internal Revenue Service, 1111 Constitution Avenue, NW, Washington, DC 20224. Comments may also be sent electronically, via the following e-mail address: Notice.comments@irscounsel.treas.gov. Please include “Notice 2016–66” in the subject line of any electronic communications. All comments submitted will be available for public inspection and copying.
VEBA PLAN LLC leverages its years of experience with protecting taxpayers to help its clients navigate the complex world of captive insurance compliance, with its team of former high-ranking IRS executives, key congressional personnel and experienced litigators ensuring that each client has the strongest defense possible in the event of an audit.Doing What's Best For You Or Your ClientWhether You Are A CPA...If your client has a captive, you need to evaluate whether they are compliant or not. The IRS is looking at business owners with captives, as well as the CPAs and financial advisors that serve them.Let us help you and your client.Or A Business Owner...It doesn’t matter if you’re under audit or not, making sure your captive is compliant should be top priority.alliantNational can help lower the risk of the IRS cracking down on your insurance arrangement, and will dramatically improve your case against the agency if you are audited.What Is A Captive Insurance Company?Insurance costs can be a big problem for successful companies. Oftentimes a company may find that third party insurance is commercially unavailable or the commercial insurance that is available may be overly expensive. A company can put up its own capital to form a wholly owned subsidiary insurance company to solve these problems. These types of subsidiaries are known as captive insurance companies.Captive insurance companies can not only fill in gaps in existing coverage but they also provide deductibles on existing coverage. Contributions to the captive insurance company can also be tax deductions under Internal Revenue Code section 831(b). Captive insurance companies also provide pricing stability and program control. Small Captives are on the IRS hit list and are being audited. Want to fight IRS and get all your money back from the promoter who sold you the abusive Captive. As an expert witness Lance Wallach has never lost a case. His partners have decades of experience working for the IRS and as tax professors.
ReplyDeleteabusive micro-captive insurance shelters and abusive syndicated conservation easements
ReplyDeletePublished on March 13, 2020
Edit article
View stats
call firstStatus is online
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Speaker, author expert witness at VEBA LLC
218 articles
The Internal Revenue Service today warned taxpayers to steer clear of abusive tax avoidance schemes and the unscrupulous individuals who promote them. Three variations of these schemes – abusive trusts, abusive micro-captive insurance shelters and abusive syndicated conservation easements -- are featured in the final installment of this year's "Dirty Dozen."
Taxpayers are reminded that those who participate in illegal schemes may face prosecution, civil litigation and ultimately having to pay all taxes owed along with stiff penalties and interest. Participants who utilize such schemes for tax evasion also risk imprisonment.
The three schemes described in today's release all start with a legitimate tax-planning tool that is improperly distorted almost always by a promoter to produce benefits that are too good to be true and ultimately seriously compromise the taxpayer. Taxpayers should be highly skeptical of such claims.
Abusive tax evasion schemes involving trusts
Changes in bank secrecy laws of foreign jurisdictions have revealed a plethora of foreign tax evasion schemes involving trusts, and the IRS is actively examining these cases, as well as a variety of tax evasion schemes involving the use of domestic trusts.
Abusive trust arrangements often use multiple layers of trusts as well as offshore shell corporations and entities that are disregarded for U.S. tax purposes to attempt to hide the true ownership of assets and income or to disguise the substance of transactions. Although these schemes give the appearance of separating responsibility and control from the benefits of ownership, such as through the use of purported mortgages or rental agreements, false invoices, fees for services never performed, purchase and sale agreements and distributions, the taxpayer in fact continues to control the structures and directs any benefits received from them.
Taxpayers should be aware that abusive tax evasion arrangements involving trusts will not produce the tax benefits advertised by their promoters. U.S. taxpayers engaged in transactions with foreign trusts may be subject to significant information reporting penalties for failure to file Forms 3520/3520A, as applicable. For more on penalties, see Abusive Trust Tax Evasion Schemes - Law and Arguments (Section VII) on IRS.gov.
Form 14242, Report Suspected Abusive Tax Promotions or Preparers (PDF), contains a questionnaire that should be used to record informant contacts and to facilitate referrals to t. For more see DOJ Press Release 18-1672.
The Internal Revenue Service is urging taxpayers involved in syndicated conservation easement transactions to consult with their tax advisors followin
ReplyDeletePublished on March 13, 2020
Edit article
View stats
call firstStatus is online
call first
Speaker, author expert witness at VEBA LLC
219 articles
The Internal Revenue Service is urging taxpayers involved in syndicated conservation easement transactions to consult with their tax advisors following a recent U.S. Tax Court decision. The IRS also plans to continue aggressive enforcement efforts in this area. In late 2016, the Internal Revenue Service designated certain syndicated conservation easement arrangements as “listed transactions” in Notice 2017-10 (PDF).
On December 13, 2019, the U.S. Tax Court entered its first decision on a syndicated conservation easement transaction. In TOT Property Holdings, LLC v. Commissioner, Docket No. 005600-17, the Tax Court sustained in its entirety the IRS’s determination that all tax benefits from a syndicated conservation easement transaction should be denied and that the 40% gross valuation misstatement and negligence penalties applied. The Tax Court found that the transaction failed the legal requirements app