Click on link above to see the Powerpoint presentation of: Ethics: Insider Secrets to Avoid Malpractice and Huge Penalties
New BISK CPEasy™ CPE Self-Study Course
CPA’s Guide to Life Insurance
Author/Moderator: Lance Wallach, CLU, CHFC
The CPA faces a daunting series of roles—those of advisor, practitioner, and consumer.Life insurance can be a powerful tool; improperly wielded, it can lead to malpractice.
The authors hope this text effectively introduces the advisor to basic and also more complexconcepts,enablingtheadvisortoappropriatelycounselclients,oratleastspotpitfallsand client opportunities.Similarly, the authors hope the practitioner who is licensed and sells insurance is aware of the myriad options available and which best help the client.Finally, the authors hope the CPA as consumer gains an understanding of the important concepts that can help the CPA on a personal level.
This text and corresponding video was a daunting challenge—how to encapsulate the complex field of life insurance and its applications into an understandable and useful reference.The authors hope this was accomplished.
Program Learning Objectives
Upon successful completion of this program, the user should:
·Understand the basics of life insurance
·Have a general understanding in determining insurance needs
·Be aware of the major pros and cons of each type of insurance
·Be familiar with business related insurance
·Be familiar with “split-dollar insurance”
·Be familiar with foundational estate planning issues
·Understand how life insurance is used to protect the estate
·Understand basic buy-sell agreement theory (estate planning for the business)
·Understand basics about various retirement plans
·Understand alternatives to cashing out or terminating a policy
Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots, by Sid Kess
Author/Moderator: Lance Wallach, CLU, CHFC
This course will enable the practitioner to better understand many of the abusive insurance and annuity-based products being marketed to your clients and how you can alleviate exposure to IRS scrutiny.
Identify potentially abusive deductions claimed on your client’s tax return
Enable the practitioner to advise his clients so they can avoid IRS penalties and deduction disallowances
Learn the pros and cons of the current strategies being employed by financial professionals in developing comprehensive financial plans for individuals and businesses
Learn to avoid financial exposure to yourself and your clients for aggressive insurance, retirement and financial planning strategies being marketed today
Accepted for CFP® credit.
New and Bestselling AICPA CPE Self-Study Courses
Best Sellers – March 2008
Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots, by Sid Kess
Author/Moderator: Lance Wallach, CLU, CHFC,
Excerpts have been taken from this book about:
The following example is unfortunately not an isolated incident of an abusive sales practice.If accountants were consulted more often by their clients, maybe the following would never happen.
Senior citizen clients thought they had every reason to trust Mr. Sell BigPolicy as a financial counselor.The insurance agent had obtained a designation recognizing him as WE DO NOT WANT TO MENTION THE NAME Senior Advisor.He obtained this designation in 2002, a credential he made sure to advertise on fliers sent to retirees.
He did not mention how easy it had been to get that title.
He had paid $1,095 for a correspondence course, then took a multiple-choice exam with questions like, “Marketing can best be described as:” (The answer: “The process or technique of promoting the sale or distribution of a product or service.”) Like more than 18,700 other applicants since 1997, he passed.
Insurance companies, eager for sales representatives, embraced Mr. Sell Bigpolicy, as they have thousands of other newly credentialed advisors.
The following year, multiple insurers paid him commissions totaling $720,000 as his business with retirees soared.
But many of those sales came from steering older Americans into unwise investments, regulators contend in a lawsuit.
Mr. Sell Bigpolicy denies all wrongdoing, but one of his clients – a 73-year-old widow caring for a son with Down syndrome – said he tricked her into buying complicated insurance contracts that left her unable to pay dental and home repair bills.
“His office was filled with things saying he was certified to help seniors,” said that client.“The only one he really helped was himself.”
Taking care of the finances of older Americans is a huge and potentially lucrative field, and the market is growing.Attracted by this market, many financial planners have shifted their focus to it – and bring widely varying attitudes and professional training to the consultation table.Training and certification in financial gerontology is now being offered by at least four groups.
The Securities and Exchange Commission does not regulate these groups – or any other groups that provide financial planning certification, for that matter.“The S.E.C. does not endorse any professional designation,” said Susan Wyderko, director of the office of investor education of the S.E.C.
The absence of government supervision is a problem, said Stephen Brobeck, executive director of the Consumer Federation of America.“There’s an opportunity for fraud,” he said, adding that older people need to be very careful about whom they trust for advice.
Regardless of any planner’s credentials, the S.E.C. and consumer organizations say the best approach is “buyers beware.”
Investors can learn how to check the background of a financial planner, including any disciplinary actions, at the S.E.C.’s website, www.sec.gov.Such background checks, along with a discussion about an advisor’s approach to investing, are well advised before signing up with a planner.
“We see too many investors who might have avoided trouble,” Ms. Wyderko of the S.E.C. said, “had they asked basic questions right from the start.”
Mr. Sell Bigpolicy is one of tens of thousands of financial advisers working hand-in-hand with insurance companies to market themselves to older Americans using impressive sounding credentials.
Many of these titles can be earned in just a few days from businesses concerned only with the bottom line and sound similar to established credentials that require years of study, difficult tests and extensive background checks.
Many graduates of these short programs say they only want to help older Americans. But they are frequently dispensing financial counsel that they are not qualified to offer, advocates for the elderly say. And thousands of them are paid by some of the country’s largest insurance companies to sell elderly clients complicated investments that some economists say most retirees should never own.
More than two dozen such programs now exist, and have enrolled more than 39,000 people over the last decade.
But some of the existing programs, which are often linked to insurance companies, have taught agents to use abusive sales techniques, regulators say.
Some insurers have been listed as sponsors at seminars with names like the MillionDollarAcademy, where thousands of sales representatives were advised to scare retirees by saying, “I am all that stands between you and potential catastrophic loss.” Other seminars instructed agents to “drive a wedge” between retirees and their established advisors.
“The insurers are happy to turn a blind eye to what salesmen are doing, as long as they make a sale,” said Minnesota’s attorney general, Lori Swanson, who is suing several companies, contending that their products are at best inappropriate, and possibly worse.
Insurance companies say they investigate the backgrounds of all agents, screen all sales to consumers to make sure they are appropriate, and have terminated representatives using improper sales methods. Those companies said they were not aware of abusive methods taught at any seminar they endorsed.
Some insurance companies say that they do not tolerate misrepresentation.
Another insurance company, in a statement, said “Any evidence of sales agent misconduct, without exception, results in immediate termination.”
Nonetheless, complaints over sales of insurance products have soared.In particular, grievances have stemmed from annuity sales.Obviously, occasionally a buyer of a product buys it without a full understanding of the product.If the product does not perform as expected, possibly because the stock market went down, the buyer may have a selective memory failure.The buyer can then complain to the insurance company, among other places.If the salesperson sold in good faith, and the product was appropriate, sometimes the buyer may still have recourse.Is this fair?
In interviews, sales agents who have been accused of wrongdoing invariably say that they followed the guidance of insurance companies.
But consider, for example, that the vast majority of annuity sales do not offer immediate payouts. Instead, they require buyers to wait as long as 10 years to begin receiving benefits. Such contracts, known as deferred annuities, made up 97% of all annuity sales last year.
Deferred annuities, however, offer sales agents the richest commissions, which is one reason so many of them are sold every year, regulators say. Selling a $100,000 deferred annuity, for example, typically earns a sales representative $9,000, though buyers are sometimes prohibited from touching much of their money for 10 years without incurring penalties.No-load annuities, may feature little or no commission, and may not have penalties.Annuities with shorter tie ups carry much smaller commissions.
In summation, if it is true that sales agents who push large deferred annuities with long tie up periods are only following company guidance, that may be as negative a commentary on the companies as on the agents.
“An annuity that pays a fixed immediate income offers seniors a lot of security,” said Jean Setzfand, director of financial security with AARP. “But a deferred annuity is almost always a bad idea for a retiree.”
Those concerns, however, have not stopped many insurance agents from aggressively selling deferred annuities.
Some of those agents have been trained by organizations that require only a few days of classroom instruction.
For instance, the 1,200 people who have enrolled in a different senior adviser program spent only four days in a classroom, according to a spokesman.
The organization which gave Mr. Sell Bigpolicy his credentials is a for-profit company that has trained 24,000 enrollees since it was started in 1997.
The company that gave Mr. Sell Bigpolicy his designation has a course that lasts three and a half days, according to recent participants, and includes uplifting lectures, overviews on the sociology of aging and exercises including peering through vision-blurring lenses to get a sense of how some clients’ eyesight can falter.
Regulatory authorities tend to be ultra critical of these programs.
“There are limitless phrases being coined to convey an expertise in senior finances,” said Massachusetts securities regulator William F. Galvin. “Most of them seem designed to trick seniors into listening to swindlers.”
Most insurance salespeople are honorable and are not swindlers.As in most lines of work, however, not everyone is honorable and does the correct thing.
A representative for the organization said the program’s courses and questions were written and evaluated by experts. In a statement, the company said its training was intended to supplement, not substitute for, professional credentials and education. The organization began asking titleholders in March to disclose to potential clients that designation alone does not imply expertise in financial, health or social matters.
Despite that disclaimer, the company has trained thousands of insurance agents and other financial advisors. And about 100 companies, many of them insurers, endorse the designation, said a spokesman for the group.
Soon after Mr. Sell Bigpolicy received his designation, Mr. Sell Bigpolicy started displaying it in ads and on letters inviting retirees to seminars over free chicken lunches, according to Massachusetts regulators.
At those meetings, Mr. Sell Bigpolicy told retirees that they were perilously close to financial calamity, according to Massachusetts regulators and attendees. He warned them that the stock market’s ability to offset inflation was “a big lie,” according to documents collected by those regulators. Banks contained “weapons of mass destruction,” read one handout.
But annuities, Mr. Sell Bigpolicy noted, offered guaranteed returns, attendees said. At the time, he was authorized to sell annuities offered by more than two dozen insurance companies, state records show.
Mr. Sell Bigpolicy’s script, Massachusetts regulators say, used materials from another training company that had more than a dozen insurers as “partners” or “carriers” on the company’s Web site.
There are a few dozen companies, like the training company in question, that teach sales agents how to find retirees willing to buy annuities.
Some insurance companies say they endorse only training programs that are committed to ethical sales tactics and that their support is often limited to providing speakers or marketing materials. But they acknowledge that they cannot always police how agents present themselves.
Dozens of lawsuits against insurers contend that those companies failed to adequately supervise sales agents who sold inappropriate annuities to aging clients and then did not act when buyers complained.
Some insurers, in court filings and interviews, say they spend millions of dollars supervising sales agents and investigating consumer complaints.
Some insurance companies, and some state regulators, have changed the rules governing how annuity sales agents can behave.
This year, Massachusetts prohibited most financial advisers from using some titles unless they were recognized by an accreditation organization or the state. In 2007, two of the largest insurers told sales agents they could not use the designation of WE DO NOT WANT TO MENTION THE NAME senior adviser.
But in most other states and at most insurance companies, sales representatives can use any title they choose.
For his part, Mr. Sell Big Policy, while he awaits the outcome of his case, is still approved to sell annuities by more than two dozen insurers, according to state records. This is not an isolated example, which does not mean that an accountant should think that all insurance salespeople behave like this sales person.This example, in differing versions, does happen.If the customer consulted his or her accountant, which admittedly most do not, the above example, or something like it, may not happen.
Lance Wallach is a frequent speaker at nationalconventions and writes for more than 50 national publications.Visit www.vebaplan.com or call 516-938-5007.
The information provided herein is not intended as legal, accounting, financial or any other type of advice for any specific individual or other entity.You should contact an appropriate professional for any such advice.
NSA MemberLink: April 30, 2008
ABUSIVE WELFARE BENEFIT AND RETIREMENT PLANS CAN LEAD TO SEVERE PENALTIES FOR ACCOUNTANTS By Lance Wallach
Accountants who are unaware of recent developments are likely to encounter a nightmarish scenario that may play out something like this:you sign a client’s tax return that claims a tax deduction for participation in a “welfare benefit plan”.A few years pass, and nothing happens.Then, on audit, the deductions are disallowed and your client is hit with back taxes, penalties, and interest.He discovers that he may be looking at a large penalty for not disclosing his participation in the plan to the IRS.
Naturally, at this point, your client wants out of the plan.But he discovers that he cannot get the money that he has contributed out of the plan.He finds that the money is being used by the plan sponsor to fight the IRS; his money is being used to defend a plan that he no longer wants to be in.This is claimed to be legal.Or he may even find that the money is simply gone, that it has been stolen or otherwise misappropriated.
And now you find that you are a “material advisor”with respect to your client’s participation in the plan.Like your client, you were supposed to disclose your role here; in your case, as a “material advisor”.You also may be looking at a large penalty for failing to disclose.
If you think this could never happen to you, think again.
Welfare benefit plans are a creation of and are sanctioned by Section 419 of the Internal Revenue Code. There are single employer plans and multiple employer plans; the latter rely mostly on IRC Section 419A (f) (6) (in the most common cases where there are ten or more employers as part of the same plan). The 419A(f)(6) plans are, and perhaps always were, generally regarded as abusive, and were substantially curtailed in recent years by harsh IRS regulation. Amazingly, however, they refuse to totally die, and are still being marketed. These plans are called listed transactions (more on that later).
While the principle purpose of this article is to discuss the current state of the welfare benefit plan, and everything outside of this paragraph will do just that, it is perhaps worth noting that welfare benefit plans are not the only subject of current IRS scrutiny and/or regulation.The Section 412(i) defined benefit plan, for example, is such a target that a task force has been formed internally solely to audit 412(i) plans.Many of them are being deemed listed transactions, many of the plans are being involuntarily terminated, and back taxes, penalties, and interest are being assessed.Not surprisingly, all of this has resulted in considerable litigation.
Single employer welfare benefit plans are now more popular than multiple employer plans. All welfare benefit plans tend to share certain characteristics, however. They tend to be marketed most frequently by insurance agents and financial planners, and sometimes by accountants and attorneys. Prospects tend to be professionals and profitable small businesses. The most attractive selling point is the ability to claim large tax deductions and remove money tax free. Life insurance tends to be the funding vehicle. Often cheap term insurance is purchased for rank and file workers and some form of permanent coverage (universal life, variable life, etc., for the owners and key employees. But many times workers are completely left out of the plan. For businesses looking to do as little as possible for workers, a selling point is that the great majority of benefits, in most cases, eventually go to the owners. This type of discrimination was recently addressed by IRS Notice 2007-84, which disallowed tax deductions and penalties with respect to welfare benefit plans that discriminate. If done correctly, the plans can accomplish things like facilitating estate planning, business succession, and asset protection. But the promised tax deduction is usually the sizzle that sells the steak.
In October of 2007, welfare benefit plans were affected by IRS rulings. The two most important developments were Revenue Ruling 2007-65, which declared, in essence, that premiums paid inside of a welfare benefit plan for cash value life insurance were not tax deductible, and Notice 2007-83, which identified the trust within welfare benefit plans involving cash value life insurance policies, AND substantially similar arrangements, as listed transactions. In other words, in essence, not only are premiums paid for cash value life insurance policies in welfare benefit plans not tax deductible, but, and far more importantly, the plans themselves are now listed transactions. This, in turn, means that most welfare benefit plans are now listed transactions, because most feature cash value life insurance.This designation creates disclosure obligations with absurdly harsh penalties both for failure to disclose or incorrectly or incompletely disclosing, as we shall soon see.
A listed transaction, basically, is any transaction identified as such by specific IRS guidance OR any transaction substantially similar to the specifically identified transaction. Participants in listed transaction must file Form 8886 with both the Service and the Office of Tax Shelter Analysis. Failure to timely and completely file leads to penalties of $100,000 for individuals and $200,000 for corporate taxpayers.
The practitioner has filing requirements, also, which can lead to equally severe penalties, if the practitioner qualifies as a “material advisor” with respect to one of these transactions. What is a material advisor? Basically, someone who gives advice, sells, or otherwise plays a significant part in the promotion, sale, or paperwork with respect to a taxpayer’s participation in a listed transaction. Put simply, from an accountant’s standpoint, you must give advice, the client must do it, and you must satisfy a certain income threshold with respect to the transaction, usually $10,000. The accountant who signs a return taking a tax deduction with respect to the transaction is surely a material advisor, if the income threshold is met.
A problem is that many accountants are not even aware of these plans. Often it is discovered when preparing the client’s tax return, at which point the client expects you to allow the deduction and sign the return, since the client was sold a tax deduction. Or worse yet, the deduction may already have been disallowed on audit. The point is that, far too frequently, the practitioner does not even discover a client’s involvement in a listed transaction until too much damage has already been done. This is often the case if the contribution has already been made, as it usually has, and irretrievably so if the deductions have already been disallowed on audit. And added to all of this is the distaste that most professionals must have for all of these policing types of duties, to say nothing of the difficulties that are created with clients and, probably, the loss of some clients.
The material advisor must file Form 8918 describing her exact role in the client’s participation in the transaction. Failure to file can lead to penalties imposed on the advisor that are as severe as those imposed on taxpayers ($100,000 for individuals and $200,000 for corporations) who fail to file Form 8886. The accountant may escape material advisor status by not meeting the $10,000 income threshold. A problem, however, is the accountant who is paid $10,000 in the aggregate by the client, but not that much specifically with respect to the listed transaction. Does such a person satisfy the income threshold? The author and his associates have discussed this point, among others, directly with IRS personnel who actually wrote published guidance in this area. The best we have been able to get is a declaration that any test that would be applied to the determination of any of these issues would have to consider all surrounding facts and circumstances. This would be unlikely to yield any general rules, for each situation has its own facts and circumstances.
Another section that the practitioner, or at least the prudent one, should be aware of, largely apart from what has been discussed so far in this article, is Section 6701, entitled “penalties for aiding and abetting understatement of tax liability.” This penalty is imposed upon those who assist in, procure, or advise while knowing or having reason to believe that the subject matter will be used in connection with any material matter arising under the tax laws and who know that the use thereof would result in the understatement of another person’s tax liability. The penalty may be applied separately to each occurrence, and it is $1,000 if an individual is the taxpayer and $10,000 for a corporate taxpayer.
Three (3) definitions are now in order, which will hopefully help to clarify any confusion that may exist in the reader’s mind. A “material advisor” is any person who provides any material aid, assistance, or advice with respect to organizing, managing, promoting, selling, implementing, insuring, or carrying out any reportable transaction, and who directly or indirectly derives gross income in excess of a certain threshold amount. More on threshold soon, but the most common one is $10,000 for listed transactions. A “reportable transaction”, basically, is any transaction which has been deemed to have a potential for tax avoidance or evasion. That is pretty broad, and the reader should consult the regulations under section 6011 for more on this. Finally, a “listed transaction” is a reportable transaction which is identical or substantially similar to a transaction specifically identified as a tax avoidance transaction.
As for threshold amounts, in the case of reportable transactions, it is $50,000, if substantially all tax benefits are provided to natural persons, and $250,000 in other cases. Natural person is construed most broadly, generally ignoring trusts, corporations, and other such entities. For listed transactions, the numbers are $10,000 (previously discussed) and $25,000.
Lance Wallach speaks and writes about benefit plans, and has authored numerous books for the AICPA, Bisk Total tape, and others. He can be reached at (516) 938-5007 or email@example.com. For more articles on this or other subjects, feel free to visit his website at www.vebaplan.com.
The information contained in this article is not intended as legal, accounting, financial or any other type of advice for any specific individual or entity. You should seek such advice from an appropriate professional.
NSA ConnectED: Your Connection to Quality Education Right on Your Desktop NSA ConnectED webinars provide a very cost-effective way for you to get CPE anywhere you have a computer, a high speed internet connection, and a phone. The NSA member discount rate is just $35 for 1 webinar—Special Introductory Offer for NSA Members: Sign up for 3 Webinars & Get the 4th FREE! For more information, click here: NSA ConnectED Webinars.
Ethics: Insider Secrets to Avoid Malpractice and Huge Penalties Thursday, May 22, 2008 2:00-4:00pm Eastern Daylight Savings Time (11:00am Pacific) Recommended for CPE Credit: 2 Hours Ethics Click Here to Register Now This webinar will help you navigate some of the current ethical minefields inherent in practice today, especially under Circular 230. - Understand many of the abusive insurance and annuity based products being marketed to your clients and how to alleviate IRS scrutiny. - Identify potentially abusive deductions claimed on tax returns, which include many popular retirement and welfare benefit plans. ? Learn about various disclosure requirements and how to avoid large penalties, both to yourself and your client. - Protect your senior clients from abusive life settlements, reverse mortgages, annuities and more. - Discover opportunities available under the Pension Protection Act and new regulations, and how to use them correctly.
This webinar will give you expertise in tax shelters, listed transactions, captive insurance, 419 and 412i plans, premium finance, and other potentially abusive products and strategies.
Presented by Lance Wallach, CLU, CHFC, CIMC, a frequent speaker on pensions, VEBAs, financial and estate planning, practice management, and tax-oriented strategies at accounting and financial planning.
New Spring/Summer 2008 AICPA CPE Self-Study and On-Site Training Catalog is here!Best Selling Course From Catalog:
The New Spring/Summer 2008 AICPA CPE Self-Study Catalog is here! Turn to the AICPA for a wide variety of quality training and educational resources for you and your staff.
Sid Kess’ Practical Alternatives to Commonly Misused and Abused Small Business Tax Strategies: Insuring Your Client’s Future
Author/Moderator: Lance Wallach, CLU, CHFC, CIMC
A perfect follow-up to “Avoiding Circular 230 Malpractice Traps and Common Abusive Small Business Hot Spots,” this course was created by the renowned Sid Kess. Learn the best strategies for reducing taxes and building, conserving and passing wealth to the next generation while at the same time avoiding abusive strategies. Utilize retirement planning strategies under the Pension Protection Act and the latest health care financing methods. Advise your clients how to avoid being victims of IRS enforcement of aggressive insurance and retirement products.
Identify practical alternatives to abusive tax shelters
Understand how to integrate financial products as part of a retirement plan
Discover how to use innovative retirement and financial programs to improve business and personal financial wealth of your clients
Optimize your value in the planning process between your clients and their financial advisors
ANASBA Field of Study:Taxes
Recommended CPE Credit:4
Accepted for CFP® credit.
Chapter 1 - Planning for Business Owners
Building the Perfect Retirement Plan
SEP IRA: The Good
SEP IRA: The Bad
SEP IRA: The Ugly
The Double K
Defined Benefit Plans
Adding Survivor Benefits
412(i) Defined Benefit Plan
Cash Balance Plans
VEBAs and 419 Plans
Taxability of Trust Net Income
Taxability of Excess Benefits
Group-Term Life Insurance Plan
Post-Retirement Medical Benefit
Voluntary Employees Beneficiary Association (VEBA) - Commentary
New Development - Welfare Benefit Plans under Section 419(e)
Executive Carve Out Long-Term Care
What Is Long-Term Care?
How Much Does It Cost
Benefits of Long-Term Care Insurance to Employees
Benefits of Long-Term Care Insurance to Employers
Executive Carve Out Long-Term Care
Long-Term Care Insurance Premium Deductibility
2007 Eligible Long-Term Care Insurance Premiums Age-Based Deduction Limits
Chapter 2 - Personal Financial Planning
Stretch IRA Example
Stretch IRA Pitfalls
Other Beneficiary Pitfalls
Important Questions Your Client Should Ask Their IRA Custodian
When a Stretch IRA Might Not Make Sense
What Investments Should be In Your Client's IRA?
What Makes a Good Estate Plan?
Generation Skipping Tax (GST)
Pay Estate Taxes at a Discount
Estate Planning Mistakes of the Rich and Famous
Estate Tax Problems
Leaving Money Outright to Children
Pension Plan Beneficiary Problems
Premium Financing as a Tool to Pay Life Insurance Premiums
The Benefits of Premium Financing
Type of Premium Financing Arrangements
Interest Rate Risk
General Account Universal Life
Variable Life Insurance
Single Index Life
Multiple Index Life
Premium Financing Components
Repaying Premium Loans
Income Tax Considerations
Gift Tax Considerations
Estate Tax Considerations
Premium Finance Due Diligence
Life Settlement History
The Life Settlement Market
Life Settlement Case Studies
The Insurance Swapout Process(TM)
Reasons for Using an ISP
Why You Would Not Want to Use an ISP
Types of Annuities
Non-Qualified Funds in a Tax Deferred Annuity
Chapter 3 - Advanced Planning
Hedge Fund Risks and Disadvantages
Hedge Fund Advantages
Hedge Fund Investing Styles
Hedge Fund of Funds
Mutual Funds That Follow Hedge Fund Strategies
Private Placement Variable Universal Life Insurance
Why High Net Worth Investors Use Hedge Funds
Taxation of Life Insurance
How it Works
Frequently Asked Questions
Chapter 4 - Health Insurance Planning
Health Insurance Basics
Health Savings Accounts
Health Reimbursement Arrangements
Other Health Insurance Arrangements
Self-Funded Plans and Stop-Loss
Limited Coverage and Supplemental Plans
Appendix A - Qualified Medical Expenses - Distributions from an HSA
Appendix B - Health Savings Accounts - Preventive Care, SafeHarbor
Appendix C - Sample Sections of an Actual Health Reimbursement Arrangement Summary Plan Document
Chapter 5 - Ethics Focus: Taxation
Spotlight on Independence in Tax Services
Key Ethical Dilemmas and Judgment Calls
Addressing Ethical Dilemmas
Chapter 6 - Latest Development
March 2008 Member of the Month -Lance Wallach, CLU, CHFC, CIMC
Lance Wallach, PlainviewNY, is a member of the AICPA faculty of teaching professionals and an AICPA course developer.He speaks at more than 70 national conventions a year on topics including retirement plans, financial and estate planning, reducing health insurance costs, and tax-oriented strategies. He writes for numerous publications, and has authored many books for the AICPA and Bisk.In addition, Lance has been named NSA “Speaker of the Year”.Congratulations, Lance, on being chosen NATP’s March Member of the Month!
Q. How many years have you been in the industry?
A.I have been writing and speaking about tax, insurance, financial planning and related matters for about 35 years. Because my associates are leading authorities in these fields, I have had great access to cutting edge information that others have wanted. My friends in the industry have also assisted in giving me useful information. Friends like Sid Kess, Esq., CPA, who has lectured to more than 715,000 practitioners on tax, and Ira Kaplan, Esq., CPA, have taught me how to present to audiences. Editors at the AICPA, Bisk, etc. have taught me what readers really want to know. I have just finished two books for Bisk, and two courses for the AICPA. By speaking at national conventions such as those of the American Association of Attorney Certified Public Accountants, the American Society of Pension Actuaries, the National Association of Tax Professionals, and the National Society of Accountants, I have had the opportunity to discuss important issues with IRS officials who were also speaking at these programs.
Q. What brought you to NATP and what keeps you as a member?
A.Many years ago the National Association of Tax Professionals asked me to speak at their national convention. I found out about how wonderful the organization was, and have been a member since. In fact, many of the conventions that I now speak at are a result of someone seeing me speak at the NATP and recommending me. I have also been privileged to write for the NATP publications. As a result, I have received hundreds of phone calls from members, some of whom have become my friends. I have also enjoyed mentoring members of the organization.
Q. What are the biggest challenges facing tax professionals today?
A.I think the biggest challenge facing tax professionals is the IRS trying to make them policemen. Most tax professionals do not realize that they can now be subject to large fines for nondisclosure of certain activities of their clients. I have authored a few books for the AICPA on these issues. In fact, allowing an item on a client’s tax return that turns out to be a listed transaction can be disastrous. This can happen even if the item became listed after the fact, and even if the tax professional never knew that it was listed or abusive. I have spoken at hundreds of conventions about abusive products that clients are buying. Most professions think that these products are legitimate, or think that they are retirement plans, etc. Without further education, the Tax Pro can lose his or her career, not to mention being sued.
Q. What are your goals for the future personally and for your career?
A.Most of my extra time is now spent helping tax professionals get their clients out of abusive or just bad financial products. I think that will involve more of my future time.
Q. Did you ever have a "defining moment," an embarrassing moment, or another memorable experience related to your career as a tax preparer?
One of my most memorable experiences was being named the National Society of Accountants “Speaker of the Year”.