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| by Lance Wallach |
The article in the September issue of the JofA by Lance Wallach, CLU, (“Abusive Insurance and Retirement Plans,” page 34) sounding the alarm against the use of 419(e) plans inaccurately analyzes an October 2007 revenue ruling and two IRS notices. Mr. Wallach accurately reports that Notice 2007-83 “identified certaintrust arrangements involving cash-value life insurance policies…as listed transactions.” In the next sentence he accurately states, “[Notice 2007-84] similarly warned against certain post-retirement medical and life insurance benefit arrangements” (emphasis added). But two half-truths do not a whole truth make. The juxtaposition of these sentences makes it seem as if post-retirement medical benefit plans are listed transactions. They are not. In fact, Notice 2007-84 generally praised such plans that are organized and operated properly, which Mr. Wallach fails to mention. He also fails to mention, but implies otherwise, that the Service never prohibited in Notice 2007-84 or elsewhere the use of life insurance as a funding mechanism for such plans.
Mr. Wallach also implies in his discussion of Revenue Ruling
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