Ed Zollars <ezollar[at]mindspring.com> wrote:
- quote -

I don't think headliners have any precedential value.
However I thought it was an interesting article,
nonetheless.

Veering a bit off course but still in the SE Health arena, I
found Speltz, T.C. Summary 2006-25 to be interesting. I
just have to wonder why IRS tried this one. I wish all my
clients were this fastidious in keeping records.

---
Drew Edmundson, CPA
Cary, NC

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Drew Edmundson wrote:

- quote -

The author of those "Headliners" was wise to duck any
authority. The S corporation's established "Plan" is to
provide and/or pay the premiums for health insurance for
it's employees whereever obtained. and there is nothing in
the statute that requires the policy be titled in the
S-corp's name.

"Assuming there are no other subsidized health plans, the
problem arises if the sole shareholder/ employee purchases
the health insurance in his or her own name instead of that
of the S corporation. In that case, the S corporation has
not established a plan to provide medical care coverage,
there is no fringe benefit paid to the 2% shareholder and
the provisions of IRC =A71372 do not come into play. Since
the provisions of =A71372 do not come into play, the S
corporation is not treated as a partnership and the
shareholder is not treated as a partner. Since the
shareholder is not treated as a partner, the shareholder is
not treated as self-employed and is not eligible for the
above-the-line deduction treatment under IRC =A7162(l). The
shareholder is still able to deduct the health insurance as
an itemized deduction which is subject to the 7.5% AGI
limitation."

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rew Edmundson wrote:

- quote -

I think the headliner has some real issues, since it ignores
Revenue Ruling 61-146. As well, in the hierarchy of
authority, this falls somewhat below the CCA it clarifies
(and a CCA is pretty low already <grin> ).

That is, my position is that if the company meets the
requirements of Revenue Procedure 61-146, then individual
policies can be used. Now, as we've discussed in other
venues, there may be state law insurance issues in some
states with an employer plan constructed as outlined in
Revenue Ruling 61-146, but that is another issue.

So my take is that unless the IRS withdraws Revenue Ruling
61-146, it trumps this headliner (Revenue Rulings are a lot
higher in the authority hierarchy <grin> ).

--
Ed Zollars, CPA
Podcast located at http://ezollars.libsyn.com

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

IRS Headliner 163 discusses individual health policies and
the self employed health deduction in the context of S
Corporations.

http://www.irs.gov/businesses/small/...157049,00.html

http://snipurl.com/r48r

Please note that Headliners are not citeable as authority.

---
Drew Edmundson, CPA
Cary, NC

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >