Ethical Concerns or No

Oct 31, 2016

  1. karaudio
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    karaudio New Member

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    Hello,

    I have a potential client that earns 200k a year and hasn't filed a tax return in over 20 years. The IRS hasn't had any contact with them. Long story short they fall into the group of people that would say the Income Tax isn't constitutional. They don't like the traditional banking system so I have suggested that it might be worth considering over funding a cash value life contract. I realize life insurance isn't going to shield the IRS from the values if it comes down to that.

    I'd love to hear your thoughts?

    Is it ethical to fund a policy with someones income that hasn't filed a return?

    Should I have any personal legal concerns I haven't thought about?
     
    karaudio, Oct 31, 2016
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  2. goillini52
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    goillini52 MAGA...Eat More Bacon & BUILD THAT WALL!!!

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    You could make a lot more by turning him in. I think the reward is 10 or 15%. That way, you don't have to worry about the ethics of selling him a policy.:)
     
  3. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    $200k and self-employed? Or working for someone else?

    If they're working for someone else, they are probably having enough withheld that they are simply not filing and letting the government keep any excess they may be entitled to.

    if they are self-employed, then there could be a problem, but it's not YOUR problem. However, the insurance company may ask for financials and if they haven't filed a return... you might not be able to get a policy issued in the first place.
     
    DHK, Oct 31, 2016
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  4. WinoBlues
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    WinoBlues Guru

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    Let me help you out a touch. https://aml.limra.com/nailba_default.html
     
  5. karaudio
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    karaudio New Member

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    Self employer contractor on a 1099

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    karaudio, Oct 31, 2016
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  6. DHK
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    DHK "YOU CAN'T HANDLE THE TRUTH!"

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    But how does it look?

    - Doesn't file taxes
    - Doesn't like "traditional banking"
    - High enough income

    I wouldn't touch it... unless you KNOW them. Even if you do, be prepared to justify the financial requirements in some way.
     
    DHK, Oct 31, 2016
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  7. WinoBlues
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    WinoBlues Guru

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  8. Todd King
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    Todd King IMO/FMO Owner

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    It's not our job to see if a person has or has not filed their taxes. I don't think it has anything to do with whether you write them up or not. Write them up in hopes that he company doesn't ask for financials.
     
  9. LGilmore
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    LGilmore Guru

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    Ok he makes 200k a year, how big a policy are you planning to place?

    Yes, this is a problem if you plan to insure him for a large face amount. Underwriting will ask for financials, including parts if not all of his tax returns. Especially when they can't confirm his income.

    I can't advise you on this because I don't know how bad this situation actually is. For 20 plus years no income tax, self employed also means no SS payments. I don't know if I would take this one on. I might but with caution.
     
    LGilmore, Oct 31, 2016
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  10. karaudio
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    karaudio New Member

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    The minimum insurance need is approx 500k face amount so it wouldn't need to be an unusually large face amount. Some Illustrations I've ran had annual premiums between 20k - 36k. Policies were designed to be over funded to build cash value quickly.

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    Oh I know what it looks like at a glance and I can completely see your point. Based on the conversation I had I'd be very surprised if his earnings were shady in anyway. I wont disclose specifics on a forum obviously so I laid it out as plain vanilla as I could. I appreciate your response. :)
     
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