IRS Attacks Many Business Owners with Huge Fines (412i, 419, captives, sect 79)IN THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA
HILDA L. SOLIS, SECRETARY : CIVIL ACTION
OF LABOR, UNITED STATES :
DEPARTMENT OF LABOR :
:
v. :
:
JOHN J. KORESKO, V, et al. : NO. 09-988
TABLE OF CONTENTS
I. Summary Judgment Standard. . . . . . . . . . . . . . . . . 3
II. Factual Background.. . . . . . . . . . . . . . . . . . . . 5
A. The REAL VEBA Employee Benefit Arrangement. . . . . . 5
B. The Parties.. . . . . . . . . . . . . . . . . . . . . 8
C. The Decor Plan, the Cetylite Plan, and the Castellano
Plan. . . . . . . . . . . . . . . . . . . . . . . . . 9
D. The Alleged Fiduciary Violations. . . . . . . . . . 12
III. Threshold Questions. . . . . . . . . . . . . . . . . . . 19
A. ERISA Coverage. . . . . . . . . . . . . . . . . . . 21
B. Coverage of Fiduciary Responsibility Provisions: The
“Top Hat” Exception.. . . . . . . . . . . . . . . . 37
C. Fiduciary Status. . . . . . . . . . . . . . . . . . 43
IV. ERISA Fiduciary Duties.. . . . . . . . . . . . . . . . . 61
A. ERISA Section 403, 29 U.S.C. § 1103.. . . . . . . . 63
B. ERISA Section 404, 29 U.S.C. § 1104.. . . . . . . . 66
C. ERISA Section 406(a)(1)(D), 29 U.S.C.
§ 1106(a)(1)(D).. . . . . . . . . . . . . . . . . . 70
D. ERISA Section 406(b)(1), 29 U.S.C. § 1106(b)(1).. . 73
V. Relief.. . . . . . . . . . . . . . . . . . . . . . . . . 75
iIN THE UNITED STATES DISTRI
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ReplyDeleteWhy has benefits community taken adverse view of conservatively-drafte
Started by John Koresko , Oct 16 1999 11:54 AM
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#1 Why has benefits community taken adverse view of conservatively-drafte: post #1 John Koresko
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Posted 16 October 1999 - 11:54 AM
Would anyone like to begin a discussion? I am quite disappointed that the "traditional" benefits community has generally taken a vehemently adverse view toward conservatively drafted death benefit VEBAs constructed under sec. 419A(f)(6). I have looked at the IRS Memorandum of Issues which was filed in Tax Court in Booth, 108 T.C. no. 25. On page 9, IRS counsel Anne Durning admitted that a fully-insured death benefit plan is not an experience rated arrangement.
In June, I met with Treasury officials in Washington who admitted that the "experience rating" requirement is a "failure" in their desire to prevent taxpayers from using sec. 419A(f)(6).
In Booth, Judge Laro remarked no less than 9 times that the plan in question there did not make all of its assets available for all claims, thus creating a common law test advocated by IRS at trial and in its Memorandum. Cf. Reg. sec. 1.414(l)-(1)(B)(1).
Booth created a roadmap, which affirmed theories previously espoused in several articles in Journal of Taxation of Employee Benefits and the Life Insurance Answer Book, Ch. 39 (Panel Publishers, 1998).
Did you know there is legislation pending, S.1451 the Employee Welfare Benefit Equity Act, which will codify conservative design and confirm the propriety of these plans?
Is the community's reaction the product of fear, unfamiliarity, or concern over certain comments by certain members of the Chief Actuary's office? Does anyone remember the small d.b. plan cases? I seem to recall that the same people at IRS were responsible for the unreasonable positions articulated against thousands of d.b. plans. See, e.g., Citrus Vall