Recently I have received phone calls from participants in the Sea Nine VEBA and have learned that the IRS may be auditing many more participating employers in the coming months.
Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach Following IRS audits sea nine veba, ken elliot and ramesh sarva sued. Feb 11, 201659 views2 Likes8 CommentsShare on LinkedInShare on FacebookShare on Twitter CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRScomplaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
Lance Wallach Lance Wallach Business Owner at National Offices of Lance Wallach Following IRS audits sea nine veba, ken elliot and ramesh sarva sued. Feb 11, 201659 views2 Likes8 CommentsShare on LinkedInShare on FacebookShare on Twitter CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRScomplaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
Lance Wallach Lance Wallach
ReplyDeleteBusiness Owner at National Offices of Lance Wallach
Following
IRS audits sea nine veba, ken elliot and ramesh sarva sued.
Feb 11, 201659 views2 Likes8 CommentsShare on LinkedInShare on FacebookShare on Twitter
CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRScomplaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.
Lance Wallach Lance Wallach
ReplyDeleteBusiness Owner at National Offices of Lance Wallach
Following
IRS audits sea nine veba, ken elliot and ramesh sarva sued.
Feb 11, 201659 views2 Likes8 CommentsShare on LinkedInShare on FacebookShare on Twitter
CPA Ramesh Sarva and Kenneth Elliot led Tax Fairy seekers to Section 419, which provides for VEBAs — “Voluntary Employee Beneficiary Association” plans. Properly operated, VEBAs enable employers to make deductible contributions to a plan that buys insurance for employees.
A company associated with Mr. Sarva and Mr. Elliot, Sea Nine, told employers that they could use VEBAs to get around the tax law rules against deducting most life insurance premiums. Their customers deducted contributions to VEBAs and used them to buy whole-life insurance policies with high cash value accumulation on the business owners’ lives. The owners then borrowed the cash values. The purported result was a deduction, followed by tax-free access to the deducted cash via borrowing cash values.
Tax Fairy guides can always find willing customers: “…small business owners with high net worth (often doctors with small but lucrative medical practices),” according to the IRScomplaint. It has not gone well for the Tax Fairy adherents:
Sarva has successfully marketed at least 33 separate VEBAs plans to a variety of small business owners. All of these participants have been or are currently being audited by the IRS. 13 of these participant audits have been completed and have resulted in total tax adjustments of $3,500,519.
In other words, it doesn’t work. The IRS warned people off of such plans as early as 1995, and the scheme was firmly shot down by a U.S. Court of Appeals in 2002 in the Neonatology Assoc. P.A. case. In fact, Neonatology was a Sea Nine client. Undaunted, Sea Nine kept selling the idea, selling the plans through “a network of affiliated third parties” including “independent certified publica accountants (“CPA”) and financial planners.” At least they did until yesterday, when they consented to a permanent injunction yesterday against further Tax Fairy hunts.
Sea Nine had clients all over the place; the complaint lists clients in California, Florida, Alabama, and Hawaii, all with big IRS exam adjustments.