"Niche" "Bisys" "Veba" "Doug Williams" "arch bonnema" "steve toth" "captive insurance" "michael sonnenberg" "ron snyder" "brian cave" "benistar" "norm
    bevan" "doug williams"  " williams coulson" "dennis cunning" "phil rowe" "sadi trust" "beta plan" "millennium plan" "grist mill trust" "compass welfare benefit plan"
    "sea nine" "professional benefits trust" "kenny harstein," "integrity 419" "integrity benefit plan" "veba plan" "sterling 419" "judy carsrud"







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By Lance Wallach

Taxpayers who previously adopted 419, 412i, captive
insurance or Section 79 plans are in big trouble.

In recent years, the IRS has identified many of these arrangements as  abusive devices to funnel tax deductible dollars to shareholders
and classified these arrangements as listed transactions." These plans were sold by insurance agents, financial planners, accountants
and attorneys seeking large life insurance commissions. In general, taxpayers who engage in a “listed transaction” must report such
transaction to the IRS on Form 8886 every  year that they “participate” in the transaction, and you do not necessarily have to make a
contribution or claim a tax deduction to participate. Section 6707A of the Code imposes severe penalties for failure to file Form 8886 with
respect to a listed transaction. But you are also in trouble if you file incorrectly. I have received numerous phone calls from business
owners who filed and still got fined. Not only do you have to fi le Form 8886, but it also has to be prepared correctly. I only know of two
people in the U.S. who have filed these forms properly for clients. They tell me that was after hundreds of hours of research and over 50
phones calls to various IRS personnel. The filing instructions for Form 8886 presume a timely fi ling. Most people fi le late and follow the
directions for currently preparing the forms. Then the IRS fines the business owner. The tax court does not have jurisdiction to abate or
lower such penalties imposed by the IRS.

"Many taxpayers who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions
by continuing the deferral of income from contributions and deductions taken in prior years."

Many business owners adopted 412i, 419, captive insurance and Section 79 plans based upon representations provided by insurance
professionals that the plans were legitimate plans and were not informed that they were engaging in a listed transaction. Upon audit,
these taxpayers were shocked when the IRS asserted penalties under Section 6707A of the Code in the hundreds of thousands of
dollars. Numerous complaints from these taxpayers caused Congress to impose a moratorium on assessment of Section 6707A
penalties.

The moratorium on IRS fines expired on June 1, 2010. The IRS immediately started sending out notices proposing the imposition of
Section 6707A penalties along with requests for lengthy extensions of the Statute of Limitations for the purpose of assessing tax. Many
of these taxpayers stopped taking deductions for contributions to these plans years ago, and are confused and upset by the IRS’s
inquiry, especially when the taxpayer had previously reached a monetary settlement with the IRS regarding its deductions. Logic and
common sense dictate that a penalty should not apply if the taxpayer no longer benefits from the arrangement. Treas. Reg. Sec. 1.6011-
4(c)(3)(i) provides that a taxpayer has participated in a listed transaction if the taxpayer’s tax return reflects tax consequences or a tax
strategy described in the published guidance identifying the transaction as a listed transaction or a transaction that is the same or
substantially similar to a listed transaction.

Clearly, the primary benefit in the participation of these plans is the large tax deduction generated by such participation. Many taxpayers
who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions by continuing
the deferral of income from contributions and deductions taken in prior years. While the regulations do not expand on what constitutes
“reflecting the tax consequences of the strategy,” it could be argued that continued benefit from a tax deferral for a previous tax
deduction is within the contemplation of a “tax consequence” of the plan strategy. Also, many taxpayers who no longer make
contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is taken from the plan to pay premiums to
keep life insurance policies in force. In these ways, it could be argued that these taxpayers are still “contributing,” and thus still must file
Form 8886.

It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as
described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20 which classifies
419(e) transactions, appears to be concerned with the employer’s contribution/deduction amount rather than the continued deferral of
the income in previous years. Another important issue is that the IRS has called CPAs material advisors if they signed tax returns
containing the plan, and got paid a certain amount of money for tax advice on the plan. The fi ne is $100,000 for the CPA, or $200,000 if
the CPA is incorporated. To avoid the fine, the CPA has to properly file Form 8918.

Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals,
Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He is also a featured writer
and has been interviewed on television and financial talk shows including NBC, National Pubic Radio’s All Things Considered and others.
Lance authored Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s
Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books including Avoiding Circular 230
Malpractice Traps and Common Abusive Small Business Hot Spots.

Contact him at:
516.938.5007,
wallachinc@gmail.com, or
www.taxadvisorexperts.org, or
www.taxlibrary.us.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other
entity. You should contact an appropriate professional for any such advice.



i,Penn Mutual412i,Bankers Life 412i,John Hancock 412i,Security Mutual 412i,412,Prudential 412i,Kansas City Life 412i,Mass Mutual412i,Guardian 412i,Amerus 412i,Benistar,SADI 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,Benistar 419 Plan,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,Dennis Cunning,Steve Toth,Michael Sonnenberg,Larry Bell,Scott Ridge,Randall Smith,Greg Roper,Tracy Sunderlage,Kenny Hartstein,Ridge Plan,Professional Benefits Trust
IRS attacks business owners in 419, 412,
section 79 and captive insurance plans
under section 6707A
Tax Audit 419.com
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Will Call You at
YOUR
Convenience
Call 516
938-5007
To Get
Started
Resolving
This
Problem
NOW!

Our Experts
Operate
Nationwide
Copyright 2010 - Lance Wallach - All Rights Reserved




    "Niche" "Bisys" "Veba" "Doug Williams" "arch bonnema" "steve toth" "captive insurance" "michael sonnenberg" "ron snyder" "brian cave" "benistar" "norm
    bevan" "doug williams"  " williams coulson" "dennis cunning" "phil rowe" "sadi trust" "beta plan" "millennium plan" "grist mill trust" "compass welfare benefit plan"
    "sea nine" "professional benefits trust" "kenny harstein," "integrity 419" "integrity benefit plan" "veba plan" "sterling 419" "judy carsrud"







Email Us and We
Will Call You at
YOUR
Convenience
Call 516-938-5007
To Get Started
Resolving This
Problem NOW!

Our Experts
Operate
Nationwide






By Lance Wallach

Taxpayers who previously adopted 419, 412i, captive
insurance or Section 79 plans are in big trouble.

In recent years, the IRS has identified many of these arrangements as  abusive devices to funnel tax deductible dollars to shareholders
and classified these arrangements as listed transactions." These plans were sold by insurance agents, financial planners, accountants
and attorneys seeking large life insurance commissions. In general, taxpayers who engage in a “listed transaction” must report such
transaction to the IRS on Form 8886 every  year that they “participate” in the transaction, and you do not necessarily have to make a
contribution or claim a tax deduction to participate. Section 6707A of the Code imposes severe penalties for failure to file Form 8886 with
respect to a listed transaction. But you are also in trouble if you file incorrectly. I have received numerous phone calls from business
owners who filed and still got fined. Not only do you have to fi le Form 8886, but it also has to be prepared correctly. I only know of two
people in the U.S. who have filed these forms properly for clients. They tell me that was after hundreds of hours of research and over 50
phones calls to various IRS personnel. The filing instructions for Form 8886 presume a timely fi ling. Most people fi le late and follow the
directions for currently preparing the forms. Then the IRS fines the business owner. The tax court does not have jurisdiction to abate or
lower such penalties imposed by the IRS.

"Many taxpayers who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions
by continuing the deferral of income from contributions and deductions taken in prior years."

Many business owners adopted 412i, 419, captive insurance and Section 79 plans based upon representations provided by insurance
professionals that the plans were legitimate plans and were not informed that they were engaging in a listed transaction. Upon audit,
these taxpayers were shocked when the IRS asserted penalties under Section 6707A of the Code in the hundreds of thousands of
dollars. Numerous complaints from these taxpayers caused Congress to impose a moratorium on assessment of Section 6707A
penalties.

The moratorium on IRS fines expired on June 1, 2010. The IRS immediately started sending out notices proposing the imposition of
Section 6707A penalties along with requests for lengthy extensions of the Statute of Limitations for the purpose of assessing tax. Many
of these taxpayers stopped taking deductions for contributions to these plans years ago, and are confused and upset by the IRS’s
inquiry, especially when the taxpayer had previously reached a monetary settlement with the IRS regarding its deductions. Logic and
common sense dictate that a penalty should not apply if the taxpayer no longer benefits from the arrangement. Treas. Reg. Sec. 1.6011-
4(c)(3)(i) provides that a taxpayer has participated in a listed transaction if the taxpayer’s tax return reflects tax consequences or a tax
strategy described in the published guidance identifying the transaction as a listed transaction or a transaction that is the same or
substantially similar to a listed transaction.

Clearly, the primary benefit in the participation of these plans is the large tax deduction generated by such participation. Many taxpayers
who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions by continuing
the deferral of income from contributions and deductions taken in prior years. While the regulations do not expand on what constitutes
“reflecting the tax consequences of the strategy,” it could be argued that continued benefit from a tax deferral for a previous tax
deduction is within the contemplation of a “tax consequence” of the plan strategy. Also, many taxpayers who no longer make
contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is taken from the plan to pay premiums to
keep life insurance policies in force. In these ways, it could be argued that these taxpayers are still “contributing,” and thus still must file
Form 8886.

It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as
described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20 which classifies
419(e) transactions, appears to be concerned with the employer’s contribution/deduction amount rather than the continued deferral of
the income in previous years. Another important issue is that the IRS has called CPAs material advisors if they signed tax returns
containing the plan, and got paid a certain amount of money for tax advice on the plan. The fi ne is $100,000 for the CPA, or $200,000 if
the CPA is incorporated. To avoid the fine, the CPA has to properly file Form 8918.

Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals,
Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He is also a featured writer
and has been interviewed on television and financial talk shows including NBC, National Pubic Radio’s All Things Considered and others.
Lance authored Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s
Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books including Avoiding Circular 230
Malpractice Traps and Common Abusive Small Business Hot Spots.

Contact him at:
516.938.5007,
wallachinc@gmail.com, or
www.taxadvisorexperts.org, or
www.taxlibrary.us.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other
entity. You should contact an appropriate professional for any such advice.



i,Penn Mutual412i,Bankers Life 412i,John Hancock 412i,Security Mutual 412i,412,Prudential 412i,Kansas City Life 412i,Mass Mutual412i,Guardian 412i,Amerus 412i,Benistar,SADI 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,Benistar 419 Plan,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,Dennis Cunning,Steve Toth,Michael Sonnenberg,Larry Bell,Scott Ridge,Randall Smith,Greg Roper,Tracy Sunderlage,Kenny Hartstein,Ridge Plan,Professional Benefits Trust
IRS attacks business owners in 419, 412,
section 79 and captive insurance plans
under section 6707A
Tax Audit 419.com
Email Us and We
Will Call You at
YOUR
Convenience
Call 516
938-5007
To Get
Started
Resolving
This
Problem
NOW!

Our Experts
Operate
Nationwide
Copyright 2010 - Lance Wallach - All Rights Reserved




    "Niche" "Bisys" "Veba" "Doug Williams" "arch bonnema" "steve toth" "captive insurance" "michael sonnenberg" "ron snyder" "brian cave" "benistar" "norm
    bevan" "doug williams"  " williams coulson" "dennis cunning" "phil rowe" "sadi trust" "beta plan" "millennium plan" "grist mill trust" "compass welfare benefit plan"
    "sea nine" "professional benefits trust" "kenny harstein," "integrity 419" "integrity benefit plan" "veba plan" "sterling 419" "judy carsrud"







Email Us and We
Will Call You at
YOUR
Convenience
Call 516-938-5007
To Get Started
Resolving This
Problem NOW!

Our Experts
Operate
Nationwide






By Lance Wallach

Taxpayers who previously adopted 419, 412i, captive
insurance or Section 79 plans are in big trouble.

In recent years, the IRS has identified many of these arrangements as  abusive devices to funnel tax deductible dollars to shareholders
and classified these arrangements as listed transactions." These plans were sold by insurance agents, financial planners, accountants
and attorneys seeking large life insurance commissions. In general, taxpayers who engage in a “listed transaction” must report such
transaction to the IRS on Form 8886 every  year that they “participate” in the transaction, and you do not necessarily have to make a
contribution or claim a tax deduction to participate. Section 6707A of the Code imposes severe penalties for failure to file Form 8886 with
respect to a listed transaction. But you are also in trouble if you file incorrectly. I have received numerous phone calls from business
owners who filed and still got fined. Not only do you have to fi le Form 8886, but it also has to be prepared correctly. I only know of two
people in the U.S. who have filed these forms properly for clients. They tell me that was after hundreds of hours of research and over 50
phones calls to various IRS personnel. The filing instructions for Form 8886 presume a timely fi ling. Most people fi le late and follow the
directions for currently preparing the forms. Then the IRS fines the business owner. The tax court does not have jurisdiction to abate or
lower such penalties imposed by the IRS.

"Many taxpayers who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions
by continuing the deferral of income from contributions and deductions taken in prior years."

Many business owners adopted 412i, 419, captive insurance and Section 79 plans based upon representations provided by insurance
professionals that the plans were legitimate plans and were not informed that they were engaging in a listed transaction. Upon audit,
these taxpayers were shocked when the IRS asserted penalties under Section 6707A of the Code in the hundreds of thousands of
dollars. Numerous complaints from these taxpayers caused Congress to impose a moratorium on assessment of Section 6707A
penalties.

The moratorium on IRS fines expired on June 1, 2010. The IRS immediately started sending out notices proposing the imposition of
Section 6707A penalties along with requests for lengthy extensions of the Statute of Limitations for the purpose of assessing tax. Many
of these taxpayers stopped taking deductions for contributions to these plans years ago, and are confused and upset by the IRS’s
inquiry, especially when the taxpayer had previously reached a monetary settlement with the IRS regarding its deductions. Logic and
common sense dictate that a penalty should not apply if the taxpayer no longer benefits from the arrangement. Treas. Reg. Sec. 1.6011-
4(c)(3)(i) provides that a taxpayer has participated in a listed transaction if the taxpayer’s tax return reflects tax consequences or a tax
strategy described in the published guidance identifying the transaction as a listed transaction or a transaction that is the same or
substantially similar to a listed transaction.

Clearly, the primary benefit in the participation of these plans is the large tax deduction generated by such participation. Many taxpayers
who are no longer taking current tax deductions for these plans continue to enjoy the benefit of previous tax deductions by continuing
the deferral of income from contributions and deductions taken in prior years. While the regulations do not expand on what constitutes
“reflecting the tax consequences of the strategy,” it could be argued that continued benefit from a tax deferral for a previous tax
deduction is within the contemplation of a “tax consequence” of the plan strategy. Also, many taxpayers who no longer make
contributions or claim tax deductions continue to pay administrative fees. Sometimes, money is taken from the plan to pay premiums to
keep life insurance policies in force. In these ways, it could be argued that these taxpayers are still “contributing,” and thus still must file
Form 8886.

It is clear that the extent to which a taxpayer benefits from the transaction depends on the purpose of a particular transaction as
described in the published guidance that caused such transaction to be a listed transaction. Revenue Ruling 2004-20 which classifies
419(e) transactions, appears to be concerned with the employer’s contribution/deduction amount rather than the continued deferral of
the income in previous years. Another important issue is that the IRS has called CPAs material advisors if they signed tax returns
containing the plan, and got paid a certain amount of money for tax advice on the plan. The fi ne is $100,000 for the CPA, or $200,000 if
the CPA is incorporated. To avoid the fine, the CPA has to properly file Form 8918.

Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals,
Wallach is a frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters. He is also a featured writer
and has been interviewed on television and financial talk shows including NBC, National Pubic Radio’s All Things Considered and others.
Lance authored Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and Sons, Bisk Education’s CPA’s
Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books including Avoiding Circular 230
Malpractice Traps and Common Abusive Small Business Hot Spots.

Contact him at:
516.938.5007,
wallachinc@gmail.com, or
www.taxadvisorexperts.org, or
www.taxlibrary.us.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other
entity. You should contact an appropriate professional for any such advice.



i,Penn Mutual412i,Bankers Life 412i,John Hancock 412i,Security Mutual 412i,412,Prudential 412i,Kansas City Life 412i,Mass Mutual412i,Guardian 412i,Amerus 412i,Benistar,SADI 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,Benistar 419 Plan,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,Dennis Cunning,Steve Toth,Michael Sonnenberg,Larry Bell,Scott Ridge,Randall Smith,Greg Roper,Tracy Sunderlage,Kenny Hartstein,Ridge Plan,Professional Benefits Trust
IRS attacks business owners in 419, 412,
section 79 and captive insurance plans
under section 6707A
Tax Audit 419.com
Email Us and We
Will Call You at
YOUR
Convenience
Call 516
938-5007
To Get
Started
Resolving
This
Problem
NOW!

Our Experts
Operate
Nationwide
Copyright 2010 - Lance Wallach - All Rights Reserved




    "Niche" "Bisys" "Veba" "Doug Williams" "arch bonnema" "steve toth" "captive insurance" "michael sonnenberg" "ron snyder" "brian cave" "benistar" "norm
    bevan" "doug williams"  " williams coulson" "dennis cunning" "phil rowe" "sadi trust" "beta plan" "millennium plan" "grist mill trust" "compass welfare benefit
    plan" "sea nine" "professional benefits trust" "kenny harstein," "integrity 419" "integrity benefit plan" "veba plan" "sterling 419" "judy carsrud"







Email Us and We
Will Call You at
YOUR
Convenience
Call 516-938-5007
To Get Started
Resolving This
Problem NOW!

Our Experts
Operate
Nationwide




CoatingsPro - Money Matters

March 2010

By Lance Wallach

Taxes take a large bite out of taxable mutual funds. Recent tax-break laws will end in 2010 and it would be smart for mutual fund investors
to keep an eye on one of the main drags on performance: taxes.

One key reason why mutual funds paid out such hefty taxable distributions in recent years is because they can no longer carry forward
the steep losses incurred during the 2000-2002 bear market, which had been used to offset gains in recent years.

The estimated taxes paid by taxable mutual fund (MF) investors increased 42 percent from those paid in 2006. Buy-and-hold taxable MF
holders surrendered a record-setting $33.8 billion in taxes to the government, surpassing 2000’s record amount of $31.3 billion!

Over the past 20 years, the average investor in a taxable stock fund gave up the equivalent of between 17 percent and 44 percent of
their returns to taxes. In 2006, the tax bite amounted to a hefty 1.3 percent of assets, which surpasses the average stock fund expense
ratio of 1.2 percent.

Mutual funds probably have no place in high-net-worth client portfolios. There are many strong reasons in favor of this position but most
immediately – you have probably noticed that every year you receive mutual funds statements with end-of-year form 1099s in the mailbox
and discover that a sizeable amount of your hard-earned cash is going to Uncle Sam.

If you were to subtract 50 percent (93 million plus) of mutual fund holders who hold stock fund assets in tax-free accounts (such as 401(k)
plans and IRAs), and a small number in institutional and trust funds that make a few investors tax-exempt, this would leave around 48
percent of the nation’s mutual fund investors in taxable funds.

The SEC says the average mutual fund investor in this taxable group loses 2.5 percent of annual returns to taxes each year, while other
research puts it at 3 percent. Throughout your lifetime you can see that capital gains taxes will reduce investable income substantially
when you retire.

You know the figures. Sure, during the 1980’s and 1990’s, people made money by selectively investing in mutual funds. Even today, it still
can be done; however, more than 90 percent of mutual funds have underperformed the stock market as a whole for the past five years.
You can get better odds at the horse track.

It works like this: Mutual funds with higher trading costs and built-in high tax limitations create a post-tax return that potentially delivers
fewer returns than a similar separate account.

Mutual funds kill their potential for becoming performance superstars by their high volume of trading and killer fee structure. Too much
trading causes increased taxes, while high fees reduce performance return on investment (ROI) – period.

If you own your stocks, you are in control. With mutual funds there is: no control over which securities fund managers buy and sell; no
purchases of one particular type pf stock to balance out a portfolio; and no opt-out of any particular asset class or company.

On the other hand, if you put yourself in a separate account, you are the boss. Having a separate account means you are in charge. You
set the strategy and decide what stocks or bonds make up the portfolio. You also have access to top money managers and can even
change a manager if you wish.

The mix-and-match of separately managed accounts (SMAs) makes them attractive to the new breed of investor who wants more control
and input into their portfolio. Don’t you want more control after the Madoff escapade and the Wall Street blowup?

With mutual funds, you should be advised early that you do not own the stocks in the portfolio, but merely have shares of stocks along
with a large pool of people. So what do you give up when investing in mutual funds? Control.

The individual in control of mutual funds is the fund manager. Too often, this manager is tasked with dozens or even hundreds of stocks
residing in one fund. This is exactly the situation in many of the 8,000 or more funds out there on the market- span, or lack of control.

In addition, you are tied to the whims of fund managers, who are often known to depend on “style drift” (buying securities that have no
relationship to fund objectives), excessive trading (to pump up a fund’s value as a means of boosting commissions), and other nefarious
actions – first uncovered by the Attorney General of New York State in 1993 and reoccurring ever since.

The mutual fund companies are good at cloaking information and spinning their marketing pitches to prevent investors from figuring out
exactly what they are paying to own a mutual fund.

Space limits us to expand on all the fees you pay for the privilege of owning mutual funds, but management fees, distribution or service
fees (12b-1), expense ratios, trading costs, commissions, purchase fees, exchange fees, load charges (load funds), account feed,
custodial expenses, and so on, are a part of the mix that the mutual fund companies utilize to nickel and dime you to death without most
of them ever knowing the billing score.

The SEC wants every investor to be fully equipped to make informed decisions before they hand over their hard-earned cash. The SEC
requires all corporations to disclosure any and all information impacting their financial positions so investors can make prudent decisions.
Transparency is most important due to the recurring events of the last 18 months.

Mutual fund companies provide notoriously slow reporting. It’s most difficult to find out about all the real nuts and bolts (specific equities,
bonds, or cash holdings) of a mutual fund. A mutual fund gives you data twice annually – sometimes quarterly – so the data is out-of-date
long before you receive it. Most investors do not read their prospectus reports and fund companies know this fact. Even with the
introduction of the Internet, which has sped up the tracking for securities immensely, the major fund companies have been painfully slow
to keep investors current as to what stocks the investors hold, and if and when those stocks are being traded.

Nowhere is the lack of transparency more apparent among fund companies than in costs and fees. Most investors are aware of
management fees and commissions, but other fund fees like the 12b-1 and trading fees are sublimated. Other fees are hidden and,
therefore, keep investors completely in the dark as to what they are paying.

With mutual funds, companies are slow on reporting results; the investor seldom knows in real time what socks are in his account and
companies are known to hype performance results.

Unless Congress steps up and puts mutual funds on a level playing field with other investment strategies, taxable mutual fund investors
will have to fend for themselves.

Lance Wallach, National Society of Accountants Speaker of the Year and member of the AICPA faculty of teaching professionals, is a
frequent speaker on retirement plans, financial and estate planning, and abusive tax shelters.  He writes about 412(i), 419, and captive
insurance plans. He speaks at more than ten conventions annually, writes for over fifty publications, is quoted regularly in the press and
has been featured on television and radio financial talk shows including NBC, National Pubic Radio's All Things Considered, and others.
Lance has written numerous books including Protecting Clients from Fraud, Incompetence and Scams published by John Wiley and
Sons, Bisk Education's CPA's Guide to Life Insurance and Federal Estate and Gift Taxation, as well as AICPA best-selling books,
including Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots. He does expert witness testimony and
has never lost a case. Contact him at 516.938.5007, wallachinc@gmail.com or visit www.taxaudit419.com.

The information provided herein is not intended as legal, accounting, financial or any type of advice for any specific individual or other
entity. You should contact an appropriate professional for any such advice.





i,Penn Mutual412i,Bankers Life 412i,John Hancock 412i,Security Mutual 412i,412,Prudential 412i,Kansas City Life 412i,Mass Mutual412i,Guardian 412i,Amerus 412i,Benistar,SADI 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,Benistar 419 Plan,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,Dennis Cunning,Steve Toth,Michael Sonnenberg,Larry Bell,Scott Ridge,Randall Smith,Greg Roper,Tracy Sunderlage,Kenny Hartstein,Ridge Plan,Professional Benefits Trust
Why You Should Not Own
Mutual Funds.
Tax Audit 419.com
Email Us and We
Will Call You at
YOUR
Convenience
Call 516
938-5007
To Get
Started
Resolving
This
Problem
NOW!

Our Experts
Operate
Nationwide