Guest Post by Lance Wallach

Many of the listed transactions that can get your clients into trouble with the IRS are exotic shelters that relatively few practitioners ever encounter. When was the last time you saw someone file a return as a Guamanian trust (Notice 2000-61)? On the other hand, a few listed transactions concern relatively common employee benefit plans the IRS has deemed tax-avoidance schemes or otherwise abusive. Perhaps some of the most likely to crop up, especially in small business returns, are arrangements purporting to allow deductibility of premiums paid for life insurance under a welfare benefit plan.

As regulators focus on corruption crackdowns, companies are turning to compliance committees to help them stay on the right track.

By Tracy Coenen, Contributor to CFO.com

Do a Web search for corporate compliance committees, and you’ll get hundreds of thousands of results. As compliance issues move front and center thanks to the new U.K. Bribery Act and a renewed focus on the Foreign Corrupt Practices Act (FCPA), compliance committees have become a hot new topic.

It’s hard to believe that our elected officials and the people they appoint to important jobs can be this stupid. But it’s true. They are.

Recently, Agriculture Secretary Tom Vilsack stated in a interview on MSNBC that food stamps and welfare are stimulus programs. As if that wasn’t funny enough, he went on to claim that every dollar given out in food stamps creates $1.84 in economic growth.

Are you done laughing yet?

The big buzz this week is an article in Rolling Stone regarding the SEC’s policy of destroying documents related to Matters Under Investigation (MUIs) which do not result in any agency action being taken.

At first blush, it may appear to be some sort of cover up, and that’s exactly what Rolling Stone writer Matt Taibbi wants you to think. Under further scrutiny, however, it appears that nothing improper is being done. All smoke, and no fire.

Guest Post by Lance Wallach

The IRS started auditing § 419 plans in the 1990s, and then continued going after § 412(i) and other plans that they considered abusive, listed, or reportable transactions, or substantially similar to such transactions. If an IRS audit disallows the § 419 plan or the § 412(i) plan, not only does the taxpayer lose the deduction and pay interest and penalties, but then the IRS comes back under IRC 6707A and imposes large fines for not properly filing.

Insurance agents, financial planners and even accountants sold many of these plans. The main motivations for buying into one were large tax deductions. The motivation for the sellers of the plans was the very large life insurance premiums generated. These plans, which were vetted by the insurance companies, put lots of insurance on the books. Some of these plans continue to be sold, even after IRS disallowances and lawsuits against insurance agents, plan promoters and insurance companies.

Guest Post by Brian Mahany

Business owners and corporate CFO’s all agree that tax audits aren’t fun. Let’s face it, “audit” is a dirty word. As our economy still continues to sputter, many state and local governments are getting frantic – the money needed to fund government simply isn’t coming in fast enough. What will the politicians do?  You decide the answer.

There are really just 3 choices.  Raise taxes (not politically popular), cut spending (also not popular among those receiving the spending) or collect more from existing taxpayers by increasing audits.  Guess what many tax authorities are doing?

The financial portion of a lawsuit is often high-stakes. This is especially true in cases of divorce, breach of contract, securities fraud, tax fraud, money laundering, and white collar criminal defense. Whether the other side is an individual, a company, or the government, you need an accurate analysis of the numbers for the benefit of your client.

Marcus Evans, welcome to the Streisand Effect. For those unfamiliar, the Streisand Effect is a phenomenon where someone takes a relatively small, unimportant, unnoticed issue, and makes such a big deal about it that it actually gets more publicity.

Last week I wrote about a company called Marcus Evans, who got my attention by using dishonest sales tactics and scripted phone calls. That wouldn’t have been unusual or noteworthy, except when I Googled “Marcus Evans complaints,” “Marcus Evans scam,” and “Marcus Evans fraud,” I found tons of websites that were clearly set up by the company to dominate the search engine rankings for those terms.

What scams, complaints, or frauds would Marcus Evans want to hide? I’m not sure, but the story keeps getting more interesting.

From my Thought Leadership series at Securities Docket:

White collar crime cases tend to focus on the flow of money. Government investigators analyze the finances of a company or individual to determine where money came from and where it went. It is this trail of money that leads to evidence of a crime.

Sometimes the financial evidence is direct, but often it is indirect. Consider a case of alleged tax fraud, in which the government is trying to prove that a person or business had unreported income. The evidence may be large unexplained deposits to a bank account. If the source of the funds is unknown, the government may consider the deposits indirect evidence of unreported taxable income. Making such assumptions is often necessary when investigating financial frauds, as those committing fraud deliberately try to hide the true sources and uses of funds.

I have addressed the issue of teacher compensation multiple times in the context of Milwaukee Public Schools (MPS) and the constant budget problems the district claims to have. The administrators claim that they need more money, yet time and again it is demonstrated that the district has been getting more money on a per-student basis, and in spite of the increased funding children are not being taught to read and write.