Lance Wallach Managing Director at VEBA LLC. The suit says tax attorney John Koresko retained MMWR to represent him in multiple lawsuits pertaining to his operation of a employer welfare arrangement, REAL VEBA. Koresko and his companies were converting assets held by the REAL VEBA Trust and the Single Employer Welfare Benefit Plan Trust (SEWBPT), the suit claims.
The trusts were allegedly meant to hold assets for the participants and their beneficiaries.
Within days of MMWR agreeing to represent Koresko, the U.S. District Court for the Eastern District of Pennsylvania entered a partial summary judgment against Koresko, Jeanne Bonney and PennMont Benefit Services, Inc., ruling that they had transferred trust assets to non-trust accounts.
MMWR did not withdraw its appearance on behalf of any of the parties and did not stop representing Koresko, his alleged co-conspirators or his companies.
MMWR allegedly billed and accepted payments of $1.4 million from the trusts for the representation of Koresko and his alleged co-conspirators.
KORESKO V. UNITED STATES Share Save PDF STENGEL, District Judge
John J. Koresko, Bridgeport, PA, pro se. Sean P. Beaty, U.S. Dept of Justice Tax Div., Washington, DC, for Defendant.
MEMORANDUM STENGEL, District Judge
John Koresko is the creator of the Regional Employers Assurance Leagues Voluntary Employees' Benefit Association (REAL VEBA) trust, which the IRS determined was a tax shelter. In November 2012, the IRS assessed 26 U.S.C. § 6700 penalties against both Koresko and Penn–Mont Benefit Services, the plan administrator, for their respective roles in promoting the REAL VEBA plan in 2003. As required by statute, Mr. Koresko and Penn–Mont paid a portion of their respective assessments. They then sued the United States in separate suits for a refund of the penalty they each paid—asserting that it was unwarranted, incorrect, or impermissible under several legal theories.
The action filed by Penn–Mont can be found at 13–cv–4130, E.D. Pa.
The United States filed counterclaims, requesting the penalties be paid in full. The Government asserts six counts or reasons why the REAL VEBA scheme was not a legally permissible tax exemption vehicle. The United States moved for partial summary judgment on two of those bases. Specifically, the Government is asking this court to decide if the REAL VEBA scheme failed to comply with I.R.C. § 419A(f)(6) by: 1) not providing a fixed welfare benefit for a fixed coverage period (Count V), and 2) using non-standard triggers for paying benefits (Count VI).
For the reasons stated below, I will grant the Government's motion and find that the REAL VEBA scheme did not provide a fixed welfare benefit for a fixed coverage period and used non-standard triggers for payment of benefits.
Lance Wallach
ReplyDeleteManaging Director at VEBA LLC.
The suit says tax attorney John Koresko retained MMWR to represent him in multiple lawsuits pertaining to his operation of a employer welfare arrangement, REAL VEBA. Koresko and his companies were converting assets held by the REAL VEBA Trust and the Single Employer Welfare Benefit Plan Trust (SEWBPT), the suit claims.
The trusts were allegedly meant to hold assets for the participants and their beneficiaries.
Within days of MMWR agreeing to represent Koresko, the U.S. District Court for the Eastern District of Pennsylvania entered a partial summary judgment against Koresko, Jeanne Bonney and PennMont Benefit Services, Inc., ruling that they had transferred trust assets to non-trust accounts.
MMWR did not withdraw its appearance on behalf of any of the parties and did not stop representing Koresko, his alleged co-conspirators or his companies.
MMWR allegedly billed and accepted payments of $1.4 million from the trusts for the representation of Koresko and his alleged co-conspirators.
KORESKO V. UNITED STATES
ReplyDeleteShare
Save
PDF
STENGEL, District Judge
John J. Koresko, Bridgeport, PA, pro se.
Sean P. Beaty, U.S. Dept of Justice Tax Div., Washington, DC, for Defendant.
MEMORANDUM
STENGEL, District Judge
John Koresko is the creator of the Regional Employers Assurance Leagues Voluntary Employees' Benefit Association (REAL VEBA) trust, which the IRS determined was a tax shelter. In November 2012, the IRS assessed 26 U.S.C. § 6700 penalties against both Koresko and Penn–Mont Benefit Services, the plan administrator, for their respective roles in promoting the REAL VEBA plan in 2003. As required by statute, Mr. Koresko and Penn–Mont paid a portion of their respective assessments. They then sued the United States in separate suits for a refund of the penalty they each paid—asserting that it was unwarranted, incorrect, or impermissible under several legal theories.
The action filed by Penn–Mont can be found at 13–cv–4130, E.D. Pa.
The United States filed counterclaims, requesting the penalties be paid in full. The Government asserts six counts or reasons why the REAL VEBA scheme was not a legally permissible tax exemption vehicle. The United States moved for partial summary judgment on two of those bases. Specifically, the Government is asking this court to decide if the REAL VEBA scheme failed to comply with I.R.C. § 419A(f)(6) by: 1) not providing a fixed welfare benefit for a fixed coverage period (Count V), and 2) using non-standard triggers for paying benefits (Count VI).
For the reasons stated below, I will grant the Government's motion and find that the REAL VEBA scheme did not provide a fixed welfare benefit for a fixed coverage period and used non-standard triggers for payment of benefits.