Response and Warning Regarding "Small Employer Tax Credit" Solicitation

We've received numerous inquiries from our Diocesan Clients, in regards to a solicitation that went out for a proposed "tax credit program." Burri, as leaders in tax and employee benefits law for the Catholic Church, is well-qualified to answer these questions.  However, because we are qualified we received some criticism from our clients because we didn't propose accessing these credits.  In this white paper, we will address in depth, what we believe are the tremendous risks and our concerns about attempting to claim the credit.  We do want to point out that we have no financial motive whether the credit is taken or not taken.  Our intent is for this to be a neutral assessment of the risk versus rewards, which we believe was lacking from the solicitation.

Our clients felt that the solicitation raised several red flags.  As CPA's our clients are well-versed in the code of conduct, that CPA's should look to other professionals to assist them.  It was gravely concerning to see an advertisement that suggested ignoring other competent professionals and not taking outside advice.  There also was a great level of concern that no risks were disclosed if the strategy is unsuccessful, and our clients wanted to know what are the potential risks.


These criticisms and concerns forced us to produce a response to our valued clients which we are reproducing as a white paper herein. After doing an exhaustive study of the law, we have found multiple areas of concern.  Among them, the omission of critical information about the future credit requiring insurance to be purchased only through the shop exchange, thus the inability to keep your current provider and plan; lack of information provided regarding the repercussions of filing forms 990T; repercussions on waiting periods to join the health insurance and pension plans and the portability of parish priests; the ability for the parish to rejoin the Diocesan health plan after the credit expires; potential fines for violating the employer mandate under the ACA; the need for each location to create separate plan documents for the Department of Labor; each location having to create separate 105 and 125 plan documents for the Department of Treasury (IRS); the risk of lawsuits from employees receiving different benefits because the plan must be purchased on the SHOP exchange; risk of lawsuits from employees because the premiums are different; risk that parishioners' donations might not be tax deductible unless each parish applies for and receives a new 501c(3) designation; the risk that contraception and/or abortion will be on the SHOP Exchange plan and the government will deny a religious freedom exemption because the applicant chose the tax credit, versus remaining on the exempt/accommodated Diocesan plan.

Enclosed is our white paper which we believe to be accurate, however, unlike the solicitation, we are going to provide a proper disclaimer.  This is not legal advice, and you are not a current client.  Again while we believe everything is accurate, we had to produce a tremendous amount of work in a short period of time, in response to the immediate urgency of the solicitation.

What's important to note, is that every legal point or insurance point need not be perfect. Because the law is unclear and unsettled in areas, and there are multiple regulatory agencies, our interpretations may differ on any single issue.  However it only requires a single issue for a significant financial and regulatory problem to arise.  Unlike the advertisement, we believe in providing every possible risk that we are aware of, to allow our clients to make informed decisions.


In addition we have studied this issue, not through a secular lens but through 27 years of serving the Church, and through both secular and canon law.  We have engaged our Doctor of Canon Laws; our Doctor of Laws, with a Master of Laws in taxation; our Doctor of Laws with a tax certificate, a Masters of Taxation Law with an employee benefits certificate, whom is licensed to practice before the U.S. Tax Court; our three degreed accountants...and because this is also an insurance issue, we engaged our insurance professionals that have combined experience working solely for the Catholic Church for a combined 40 years.


Dean Burri, Esq., LL.M


Table of Contents


Topic                                                                                                                             Page #

Background                                                                                                                        3

The Solicitation                                                                                                                   4

Acknowledged potential controlled group issue                                                                    5

The Argument that Diocese-Parish is not a Controlled Group                                               5

Catholic Church is a controlled group                                                                                  8

Anonymous unwritten source is not legally binding.                                                              8

Repercussions of disaggregating                                                                                          9

Notice 96-64 "Good Faith Effort" required                                                                        12  

Anti-abuse rules (discretion of the IRS)                                                                              12

Other Tax issues                                                                                                                14

More than Tax law governs controlled groups                                                                    15

ACA and Church Plan Parity and Entanglement Prevention Act                                          17      

Beyond the scope for CPA's to give tax law advice                                                            18

Tri-regulatory System - Department of Labor                                                                     19

Must purchase on SHOP Exchange, cannot keep existing   insurance                                  21

Contraception and/or abortion issues on SHOP                                                                  23

Diocesan portability of employees and priests impacted                                                      24

Employee discrimination lawsuits                                                                                        25

Question Diocesan CFO's should Ask                                                                               26

Potential Conflicts of Interests                                                                                            27

Is the Diocesan CFO Potentially Liable?                                                                            28

Malpractice Insurance                                                                                                       29

What is there to Gain?                                                                                                       29

What is there to Lose?                                                                                                       30

No Attorney-Client Privilege                                                                                              31

CFO Responsibility                                                                                                            31

Our Recommendation                                                                                                        32                                                                                     


Internal Revenue Code Section 45R(a) provides for a health insurance tax credit to certain small employers that provide insured health coverage to their employees.  Section 45R was added to the Code by section 1421 of the Patient Protection and Affordable Care Act ("PPACA"), Public Law No. 111-148.  In order to qualify for the tax credit, an employer must meet the requirements of an "eligible small employer."[1]


The proposed tax credit program relies on this section of the tax code in order to propose that a small parish receives this credit.  This leads to several questions.

  1. Are Catholic Parishes eligible for this credit?
  2. If they are eligible, are there any additional paperwork requirements, forms that must be filed and additional costs to apply and administer the credit.
  3. Are there any risks of taking this credit?  What is the risk versus the potential reward?
  4. Are there any insurance or canonical issues raised by taking the credit?

The purpose of this white paper will be to look at all four of these components, so that a Diocesan Finance manager can make an informed decision. In addition we encourage you to have appropriate professionals review our opinions. To be frank we were more than concerned the advertisement through the DFMC list serv/forum, seemed to be saying to ignore qualified professionals and lacking on disclaimers and a discussion of possible risk. We realize that many of these issues are very complex and we recognize our interpretation of these laws may be just that interpretations. However, it only takes one issue, to create a severe problem.


The Solicitation

The proposed plan simply looked at the tax code in this one section, in a vacuum, and said "the only issue here is if the parish is a small employer, as defined by the code."  They conclude they were, and therefore eligible, based on pure math of the number of employees.  An "eligible small employer" is an employer with no more than 25 full-time equivalent employees, that must have in effect a qualifying arrangement,[2] and the average annual wages of its full-time equivalent employees must not exceed an amount equal to twice the dollar amount in effect under Proposed Regulation 1.45R-3(c)(2) or $25,000.  In order to meet the requirements of a tax-exempt small employer, the employer must be exempt from federal income tax under section 501(a) as an organization described in section 501(c).[3]  This will be applicable to diocese and parishes because most, if not all, will qualify as 501(c)(3).[4]


In order to claim the credit there are several forms that must be filled out.  For tax-exempt eligible small employers, the credit is calculated on Form 8941 and attached to Form 990-T.  In the instructions for Form 8941 the Service specifically mentions "employers treated as a single employer."  The reason the Service does this is to avoid having a business owner incorporate several small businesses then taking the credit under all of them.  This practice is avoided by allowing the application of Regulation 1.414(c)-5. 

Acknowledged potential controlled group issue

The tax code issue that the author of the solicitation acknowledges exists, is whether a Catholic parish in a "controlled group" under the tax code and other laws.  In laymen terms, if the parish is part of the entire Diocese, as one employer, they are not eligible for the tax credit.  In order to potentially be eligible for the tax credit, they would have to be treated not as a controlled-group under the tax code. 


The Argument that Diocese-Parish is not a Controlled Group

The argument being made that under Internal Revenue Code 45R the credit is granted, except if you are a controlled group as defined in IRC 45R:


(5) Aggregation and other rules made applicable

(A)  Aggregation rules

All employers treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer for purposes of this section.

            IRC 414 is one of several places where controlled-groups is defined.  There are many types of businesses, corporations, trusts, non-profits, partnerships, each have different regulations on how to apply controlled-group testing under IRC 414.  One might measure stock ownership, one might measure control of the board of directors, one might measure voting rights, one might measure how property is disbursed on dissolution.  Section (e) deals with Churches, since we don't have stock holders, or private ownership:


             (e) Church plan


(1) In general


For purposes of this part, the term "church plan" means a plan established and maintained (to the extent required in paragraph (2)(B)) for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501.


(2) Certain plans excluded


The term "church plan" does not include a plan-


(A)   which is established and maintained primarily for the benefit of employees (or   their beneficiaries) of such church or convention or association of churches who are employed in connection with one or more unrelated trades or businesses (within the meaning of section 513); or


(B)    if less than substantially all of the individuals included in the plan are individuals described in paragraph (1) or (3)(B) (or their beneficiaries).



(3) Definitions and other provisions


For purposes of this subsection-


(A) Treatment as church plan


A plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches.


(B) Employee defined


The term employee of a church or a convention or association of churches shall include-


(i) a duly ordained, commissioned, or licensed minister of a church in the exercise of his ministry, regardless of the source of his compensation;


(ii) an employee of an organization, whether a civil law corporation or otherwise, which is exempt from tax under section 501 and which is controlled by or associated with a church or a convention or association of churches; and


(iii) an individual described in subparagraph (E).


(C) Church treated as employer


A church or a convention or association of churches which is exempt from tax under section 501 shall be deemed the employer of any individual included as an employee under subparagraph (B).


(D) Association with church


An organization, whether a civil law corporation or otherwise, is associated with a church or a convention or association of churches if it shares common religious bonds and convictions with that church or convention or association of churches.


(E) Special rule in case of separation from plan


If an employee who is included in a church plan separates from the service of a church or a convention or association of churches or an organization described in clause (ii) of paragraph (3)(B), the church plan shall not fail to meet the requirements of this subsection merely because the plan-


(i) retains the employee's accrued benefit or account for the payment of benefits to the employee or his beneficiaries pursuant to the terms of the plan; or


(ii) receives contributions on the employee's behalf after the employee's separation from such service, but only for a period of 5 years after such separation, unless the employee is disabled (within the meaning of the disability provisions of the church plan or, if there are no such provisions in the church plan, within the meaning of section 72 (m)(7)) at the time of such separation from service.


Catholic Church is a Controlled Group

The Catholic Church and its parishes are absolutely a controlled-group under IRC 414(e).  We will show this in many different and repetitive fashions.  You will hear things like "oh they're separately incorporated."  It absolutely does not matter, and we will show you where that is in the law.  For example, if you read IRC 414 above, it defines Church and its parishes as a controlled-group, regardless of tax I.D. numbers.


The baseless conclusion that Catholic parishes are not a controlled-group is based on the language in 45R above that refers back to (b), (c), (m), and (o).  Thus the non-tax lawyer goes "Ah Hah!, it didn't say (e) therefore it is not meant to apply to churches! Thus we can take the credit!"  However, it's obviously not that simple.  Even the author of the proposed plan a year ago in an earlier writing, stated that it was unclear whether the controlled-group regulation applied. 


Anonymous unwritten source is not legally binding

Since then, his clients have undergone 50 audits with all the time and expense and headache that entails, and, he has (in his words) convinced an IRS field agent that parishes are eligible.  However, his very own email says in one point that the audits are "complete", and at another point are "substantially complete."  By the author's own potential admission, the results may not yet be in.  Having said that, its immaterial even if an IRS field agent agrees.  There is no guarantee that the next IRS field agent will agree, or that the original audit will not be reopened and a new result obtained.  Nothing an "unnamed source", or even a named government source tells you in regards to the tax code, is legally-binding. No verbal "assurance" by ANY government official is legally binding. An excellent example was when, Al Gore said that the Obama administration was not forcing the Catholic Church to provide contraception.  Under the law, only the actual law itself, the statute, case law, common law, and published regulations are binding on the IRS.  Written guidance, by the IRS is not even binding.  Google the case of the tax lawyer who followed published IRS guidance, but the court still found him guilty.


Repercussions of disaggregating

One of the advantages of being a controlled-group that Dioceses have taken advantage of is the transfer of both religious and lay employees between locations within the Diocese without disruption of benefits.  What we mean by disruption of benefits is that there is no new waiting period for either the health plan or the retirement plan for an employee changing locations.  Also, there is no new vesting schedule for a retirement plan.  This can apply if Father is transferred from one parish to another, or if a lay employee school teacher switches between schools in the Diocese.  If they are a controlled group, they do not have these disruptions of new waiting periods, however, if the parish is a small employer this disruption would occur, due to several laws, such as the ACA.  The ability to permissibly aggregate as Dioceses have done is due to the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA"):


The EGTRRA amended the Code to substitute the term "severance from employment" for "separation of service" in certain sections of the Code, including those sections that limit distributions of salary reduction contributions made to 403(b) and 401(k) plans. Subsequent IRS guidance suggests that there is no severance from employment where an employee changes jobs and moves from employment with one member of a controlled group to another. See Notice 2002-4, 2002 I.R.B. 298. See also, however, the final section 403(b) regulations, where a transfer from employment with a section 501(c)(3) organization to employment with a related for-profit employer is treated as a severance from employment.6414(m) are treated as employees of a single employer for purposes of the following Code provisions:

  • Group term life insurance (Code section 79).11
  • Cafeteria plans (Code section 125). Code section 125(g)(4) specifically provides that the controlled group rules of Code section 414(c) apply.
  • Accident and health plans. (Code section 106)...[emphasis added]

*additional areas also apply


If a parish takes a Small Employer Tax Credit, it is effectively disaggregating from the Diocese.  However, because of the definition of "church" in the tax code, we do not believe that a parish can voluntarily deaggregate.  There are three groups within the regulations that define church control groups.  The first is "church, religious orders and secondary schools", the second is Qualified Church Controlled Organizations (QCCO's), the third are organizations that receive a lot of federal funding, or create a large profit (typically hospitals and universities).  The first category, parishes cannot deaggregate, the third category clearly can deaggregate, the second category is extremely complicated:


(d) Permissive disaggregation between qualified church controlled organizations and other entities.  In the case of a church plan (as defined in section 414(e)) to which contributions are made by more than one common law entity, any employer may apply paragraphs (b) and (c) of this section to those entities that are not a church (as defined in section 403(b)(12)(B) and � 1.403(b)-2) separately from those entities that are churches. For example, in the case of a group of entities consisting of a church (as defined in section 3121(w)(3)(A)), a secondary school (that is treated as a church under � 1.403(b)-2), and several nursing homes each of which receives more than 25 percent of its support from fees paid by residents (so that none of them is a qualified church-controlled organization under � 1.403(b)-2 and section 3121(w)(3)(B)), the nursing homes may treat themselves as being under common control with each other, but not as being under common control with the church and the school, even though the nursing homes would be under common control with the school and the church under paragraph (b) of this section.


Another code section:

Special Church Aggregation Rule. Code section 415(c)(7) provides that all years of service as an employee of a church or a convention or association of churches, or with an employer controlled by or associated with a church or convention or association of churches, is considered as years of service for one employer.

We've talked about the argument that they're making, in order to get the tax credit that argument would have to be accurate.  Now let's look at why the argument is incorrect, and is irrelevant even if incorrect.


The Affordable Care Act (ACA) states in it that controlled-groups, as defined in the IRC, are applicable and that separate tax I.D. numbers are disregarded.  This makes common logical sense; otherwise large companies could simply break into several small companies by separately incorporating them.  The health insurance coverage provisions of the Public Health Services Act ("PHSA") are applicable to church plans.[5] 


The Regulations state  that "in the case of a church plan, to which contributions are made by more than one common law entity, any employer may apply sections 1.403(b) and (c) separately from those entities that are churches."[6]  Regulation 1.403 treats "churches" the same as "qualified church controlled organizations."[7]  Basically, if more than one entity contributes to the church plan,  the church or qualified church organizations would still be counted as a control group, while the non-church entities may be counted as a separate group.  The rule does not exempt churches, it only allows for churches to be separated from nonchurches.  This means that under the diocese the parishes would be counted together while any "nonchurch" entity owned by the diocese would be allowed to permissively disaggregate.


This has the potential to disqualify parishes from the Small Employer Tax Credit.  If separate parishes are contributing to a church plan, the Service could aggregate the employees of the parishes thus disqualifying the parish because it no longer meets the less than 25 full time equivalent employee requirement. 


Notice 96-64 "Good Faith Effort" required

The Service, in Notice 96-64, 1996-2 C.B. 229, stated "government and tax-exempt organizations (including churches) may apply a reasonable, good faith interpretation of existing law in determining which entities must be aggregated under section 414(b) and (c)."  Merriam-Webster's Dictionary of Law defines "good faith" as absence of any intent to defraud, act maliciously, or take unfair advantage.  Simply ignoring the Code or pretending that it does not apply, without any legal basis is not acting in "good faith."


In the notice 96-64, mentioned above, it says the church must make a good faith effort to be aggregated under IRC 414 (b) and (c).  This technical notice from the IRS is acknowledging a vagueness in the way that IRC 45R was written.  In essence it is saying that IRC 45R is not literal.  If 45R were literal, they would simply say "Great, the Small Employer Tax Credit prohibition for controlled-groups does not apply to churches."  This notice acknowledges, specifically that churches are subject to controlled-group requirements.  And, church is defined many places in the tax code, meaning a parish is part of the controlled diocesan group, such as IRC 414(e).  Even if one were to be completely literal again and read the notice not for its meaning, but for literalness, and say "It still doesn't say (e)", there is a problem with IRC 414(o), which is an enumerated section under IRC 414R:


Anti-abuse rules (discretion of the IRS)

(o) Regulations


The Secretary shall prescribe such regulations (which may provide rules in addition to the rules contained in subsections (m) and (n)) as may be necessary to prevent the avoidance of any employee benefit requirement listed in subsection (m)(4) or (n)(3) or any requirement under section 457 through the use of-


(1) separate organizations,

(2) employee leasing, or

(3) other arrangements.


The regulations prescribed under subsection (n) shall include provisions to minimize the recordkeeping requirements of subsection (n) in the case of an employer which has no top-heavy plans (within the meaning of section 416 (g)) and which uses the services of persons (other than employees) for an insignificant percentage of the employer's total workload.

IRC 414(o) is the catch all provision.  If the IRS believes that you are trying to game the system, they will apply (o), which is enumerated under 45R. 


Each code section has regulations accompanying it, with further guidance.  The guidance for code section 414 is regulation 1.414.  Section (f) of that regulation states:


(f) Anti-abuse rule. In any case in which the Commissioner determines that the structure of one or more exempt organizations (which may include an exempt organization and an entity that is not exempt from income tax) or the positions taken by those organizations has the effect of avoiding or evading any requirements imposed under section 401(a), 403(b), or 457(b), or any applicable section (as defined in section 414(t)), or any other provision for which section 414(c) applies, the Commissioner may treat an entity as under common control with the exempt organization.

Clearly the IRS expects controlled-group testing otherwise they would not have issued form 96-64 instructing you to do it.  IRC section 414(c) is referenced in 96-64 and 45R, thus defeating the argument:


(c) Employees of partnerships, proprietorships, etc., which are under common control

For purposes of sections 401408 (k)408 (p)410411415, and 416, under regulations prescribed by the Secretary, all employees of trades or businesses (whether or not incorporated) which are under common control shall be treated as employed by a single employer. The regulations prescribed under this subsection shall be based on principles similar to the principles which apply in the case of subsection (b).

The key phrase is "common control."  There are multiple ways beyond IRC 414(e) to define  common control.  We will show you below several possibilities.  However, this is probably enough code references for any one human being; there are much easier ways to show that this is a bad idea.


Other Tax issues

Let's be honest, what this person is proposing is that we get all the benefits of receiving the tax credit without having to do any of the paperwork required to get it.  All I have to do is prove common control in any way in order for the parish to be ineligible for the Small Employer Tax Credit.  One way to prove this is to look at the USCCB, Private Letter Tax Ruling, received annually.  This letter allows all Catholic entities in the Official Catholic Directory (OCD) to receive tax benefits.  First it allows them not to all have to apply to become a 501c(3) tax-exempt organization and all the time, effort and paperwork that entails.  Now think about that for a minute.  If your parish truly is a separate small employer, do they not have to file for their own tax-exempt status?  The answer can be found in the private letter ruling, where the USCCB (and its subsidiaries) are granted group 501c(3) status.  The IRS is treating every Catholic entity in the OCD as a subsidiary of the USCCB.  This has several possible catastrophic ramifications if the parishes are separate. 


First, since this status allows donation by our parishioners to fall under tax-free status, would the parishioners of the parish still be able to deduct their donations to the parish.  I know this sounds crazy, and alarmist.  But one must understand, if one reads the tax code literally, one get certain results that seem ludicrous.  Let me explain this in a way that won't sound crazy.  The author of the proposed plan neglected to mention that part of the requirements of applying for the credit one must file a 990T, as we mentioned earlier.  Now ask yourself a question, what happens when the IRS gets a brand new form 990T, from a parish, with an EIN identifying themselves as tax exempt, and yet they don't have a 501c(3) for that EIN.  That 990T form, you can think about as a flare gun.  You are shooting up a flare that has never been seen before.  What are the consequences of shooting that flare?  There are many, this being one potential, involving other government agencies, such as the Department of Labor and the Pension Benefits Guarantee Corporation.  We are including at the end of this white paper a copy of the USCCB private letter ruling. Read it and judge for yourself if it says "subsidiary."


More than Tax law governs controlled groups

There are several different scenarios that will prove that parishes are controlled-groups, thus applicable to the general controlled-group good faith effort under the ACA.  Imagine 10 Catholic parishes in a diocese decide to split off and "do their own thing", and worship tax attorneys on Tuesdays and Buddha on Friday.  Do you think the Diocese at this point would assert that the parishes are under their control and fire Father?  Do you think the Diocese would say "that's our real estate we don't care if it's separately incorporated"? Of course the Diocese would.  Even though separately incorporated, the bishop reserves the right to appoint the priest for example, and may remove the priest.


Private Letter Ruling 8702063 (Oct. 16, 1986). IRS concluded that, in the

case of non-stock, nonprofit organizations, an entity has effective control of

another organization if at least 80 percent of its trustees or directors are either

representatives of, or directly or indirectly controlled by, such entity. A

trustee or director is deemed to be a representative of the controlling entity if

such entity has the power to remove the trustee or director and to designate a

new trustee or director.


Gen. Couns. Memo 39616 (Mar. 12, 1987). This GCM was issued concurrently with the above letter ruling and reaches the same conclusion.

Under Notice 89-23, a degree of common management or supervision is said to exist if the entity providing the operating funds has the power to appoint or nominate officers, senior management or members of the board of directors (or other governing board) of the entity receiving the funds.

I realize my example was silly to begin with to make a point.  There are real live legal cases on this subject.  There have been several Episcopal dioceses where the parish broke away from the diocese over homosexual priest ordination.  The national church sued the breakaway parishes claiming that they were separately incorporated, and that the property was owned by the parish.  In laymen's terms the hierarchical religious, canon law determines ownership, not civil law.  The Supreme Court case on this is Jones v Wolf, 1979.


IS a Church Plan eligible as "insurance"?

Until IRS Notice 2010-82, it was also uncertain IF a church plan like RETA or Christian Brothers could be qualifying "insurance" as the credit was for "insurance" premiums. And church plans are exempt from ERISA , this resolved that issue.


However it does not remove the requirement to be a stand-alone qualifying small employer, as people often misread it.  It simply allows a small employer that gets their benefits from a church plan to qualify as insurance, and not to have the plan ITSELF make a small employer a large employer.  For example if a Baptist church had a Baptist church association plan with 100 other churches. The church plan itself does not create a large employer. The underlying rules and tests are in still in place. This clarification was needed for denominations where they hire their own minister and are non hierarchal.


So common sense answer, everyone knows that the Bishop really controls the parish. It's only playing a game to look at the tax code so narrowly to say "we qualify for this credit."  I am going to say this in a different way, it may come across offensive, but we do not mean it this way. As we all know with the current lawsuits against the Church that the defense always is "the parishes are separately incorporated," and that defense never stands. 


ACA and Church Plan Parity and Entanglement Prevention Act

If the parish is a small employer then that would mean that the Diocese could make all the parishes separate and therefore not be subject to any requirements of the ACA, at all. The reason we cannot is that the ACA requires controlled-group testing and aggregation.  So is it logical that the Diocese will be a controlled-group as far as the overall ACA goes, but somehow the local parishes can get the small employer tax credit.  Why isn't this an issue up until now?  Because, you're health plan until January 1st, 2015, hasn't had to report to the IRS who is on the plan. 

However, starting January 1, the group health plan is going to report who is on the plan and their social security number.  This internal revenue code regulation is reported on forms 6055 and 6056 and is required by the ACA.  This you can think of as flare #2. You've reported the employees receiving their health insurance as part of a small group, but the health insurer is reporting that you are on a different group plan.  Now I have to shift to my insurance agent plan.  If I am not part of a large employer group, I am not eligible to be on a large employer group health plan.  I must be part of a multi-employer plan.  This is either going to be a MEWA or a MEPA.  MEPA is primarily concerned with union plans, so I think we can all agree that nobody is going to argue that the Catholic Church is unionized.  Therefore if a parish is on a health plan, other than their diocesan plan, it's going to be a MEWA.  A MEWA is not exempt from ERISA and its "deemer" clause.  Thus, all state insurance laws apply if you're a MEWA, and federal law will not pre-empt.  This creates a tremendous number of issues for the church, such as church plans do not have to be fully funded for their pensions.  Church plans can be discriminatory (think of priests having better benefits).  Church plans are exempt from COBRA and portions of HIPAA.  If one is a MEWA, one is not a church plan. And therefore it would have severe ramifications on how we treat our priests, how we fund their retirements, and several other unintended consequences. The good news is the Church heavily lobbied and Congress passed the Church Plan Parity and Entanglement Prevention Act of 1999. A church plan that is a welfare plan (and any trust under such plan) is deemed to be a plan sponsored by a single employer that reimburses costs from general church assets or purchases insurance coverage with general church assets, or both[8].  Thus, such church plans are not treated as MEWAs, but as a single employer and thus not eligible for the Small Employer Tax Credit. 

Beyond the scope for CPA's to give tax law advice

Hopefully, at this point the reader realizes that this is a very complicated legal question.  It's not as simple as "Oh yes, you qualify for the credit because you have less that 25 people!" Once it becomes apparent that there is a legal question, as to whether a tax deduction or credit is appropriate, or the law is very complex or uncertain, a CPA is prohibited from giving tax advice. At this point that advice crosses a line from a mere ministerial functions such as filling out a tax return, and becomes the unlicensed practice of law.  There are several tests which the courts employ. The most famous case is enumerated in the Bercu case[9] in which the court held that a CPA that is providing legal advice to non-clients, not in conjunction with a tax return preparation constitutes the unlicensed practice of law.  The decision rests on the nature of services provided, accounting or legal.  In laymen's terms, what the Bercu case says is two parts.  If a CPA gives tax advice to a non-client, they may be engaged in the unlicensed practice of law.  Here the email blast was clearly sent to non-clients, by a non-lawyer.  The second proposition and perhaps the more applicable proposition, is that some matters are of such a nature that they are too complex that they cross from being accountancy.  The AICPA acknowledges that CPA's have practice limitations.


Per the AICPA Code of Ethics:

"Competence represents the attainment and maintenance of a level of understanding and knowledge that enables a member to render services with facility and acumen. It also establishes the limitations of a member's capabilities by dictating that consultation or referral may be required when a professional engagement exceeds the personal competence of a member or a member's firm. Each member is responsible for assessing his or her own competence-of evaluating whether education, experience, and judgment are adequate for the responsibility to be assumed. (AICPA Code of Ethics, ET Section 56, Article V, sub .03)

Tri-regulatory System - Department of Labor

In addition, clearly a CPA is not qualified to give advice on non-tax issues.  I don't think anyone would find that statement controversial.  What virtually all attorneys and CPA's are unaware of is that in employee benefits law there is a tri-regulatory system.  Many regulations exists in three separate and distinct forms at the Treasury Department (IRS), The Department of Labor (DOL) and the Pension Benefit Guarantee Corporation (PBGC).  In laymen's terms employee benefits law came about to protect employee from unscrupulous employers.  This protecting took several forms, for example the PBGC protects corporate pensions in case their employer defaults, the Department of Labor regulates activities involving employment, in addition it regulates the welfare plans, the benefits plans themselves.  For example, if the law says you must have $1,000 deductible in your health plan, the Department of Labor would look at those documents.  If you did not have that deductible, and were subject to a tax, the Department of Treasury (IRS) would collect that tax.  So, in my example here, Labor is enforcing the law, the IRS is collecting the penalty.  Or if you prefer, "Documents (DOL) and money (IRS).  From a very simple perspective a CPA does not know about a required Summary Plan Description (SPD), and other required benefits plan documents (not to be confused with an SBC - Summary of Benefits and Coverage which is provided by insurance carriers).  What we are trying to say, that if the parishes are separate for purposes of the 990t, the DOL will receive a duplicate 990.  They will then be able to audit the documents for all the required plan documents including the SPD.  These are not simply the health insurance documents provided by the insurance carrier; these are plan documents that are required to be created for your organization. Failure to have plan documents, SPD, etc, typically result in a $110/day fine (or a $40,150/yr) for every employee.  Even if you are compliant under the IRS, you have now obligated your parishes to regulatory oversight by the Department of Labor.  You can no longer rely on being part of the Diocesan plan documents, as you are now the legal employer for the tax credit.


The Department of Labor also defines churches and controlled-groups, separate from IRC 414.  They do this because church plans are exempt from ERISA.  Therefore the must be a definition of what a church is for it to be exempt:


ERISA � 3(33)(A) states that "[t]he term 'church plan' means a plan established and maintained ... for its employees (or their beneficiaries) by a church or by a convention or association of churches which is exempt from tax under section 501 of [the Internal Revenue Code]." ERISA � 3(33)(C)(i), added by the Multiemployer Pension Plan Amendments Act of 1980("MPPAA"), further provides that "[a] plan established and maintained for its employees (or their beneficiaries) by a church or by a convention or association of churches includes a plan maintained by an organization, whether a civil law corporation or otherwise, the principal purpose or function of which is the administration or funding of a plan or program for the provision of retirement benefits or welfare benefits, or both, for the employees of a church or a convention or association of churches, if such organization is controlled by or associated with a church or a convention or association of churches."

You notice the definition here is not as stringent as the IRS rules on controlled-groups.  Again without beating a dead horse, in laymen terms, there is a whole extra regulatory scheme that you may be subject to, by applying for a short-term credit.  Is it wise to invite all this new regulatory scrutiny for a temporary tax credit.  The Department of Labor has goal to audit in the next year all for-profit companies in the United State that file a 5500 and the following year all non-profits. Obviously these are risks that should have been disclosed for one to make an informed decision to take this credit.

Insurance consequences - Must purchase on SHOP Exchange, cannot keep existing insurance

There are some issues from an insurance perspective that are important to understand which may not be apparent to a public accountant.  First, a review of the rules.  Basically, for small employers with twenty-five full-time equivalent employees (" FTE") that qualify (based on contribution and average employee income), up till 2016, they can qualify for up to a 50% tax credit for for-profit companies and  up to 35% for non-profits. This is only applicable to the portion paid by the employer. Below is an excerpt from


For tax years 2010 through 2013, the maximum credit is 35 percent of premiums paid for small business employers and 25 percent of premiums paid for small tax-exempt employers such as charities.


For tax years beginning in 2014 or later, there are changes to the credit:


*The maximum credit increases to 50 percent of premiums paid for small business employers and 35 percent of premiums paid for small tax-exempt employers.


*To be eligible for the credit, a small employer must pay premiums on behalf of employees enrolled in a qualified health plan offered through a Small Business Health Options Program (SHOP) Marketplace or qualify for an exception to this requirement. [emphasis added]


*The credit is available to eligible employers for two consecutive taxable years.



Of concern and not disclosed in the solicitation are the new requirements 2014 and 2015 that included making purchases for health insurance through the SHOP Exchange to qualify.

There you will find the following:

For tax years 2014 and later, there are changes to the credit:

*The credit can be up to 50% of your share of your employees' health insurance premiums, or, if you're an eligible tax-exempt employer, up to 35 percent of your share of premiums.


*You must purchase insurance for your employees through the Small Business Health Options (SHOP) Marketplace. [emphasis added]


*The credit is only available to you for two consecutive years.

For more information about the requirements, see Notice 2010-44, Notice 2010-82, Notice 2014-6, and Regulations for the credit.

Let's talk about the SHOP Exchange. Though the Affordable Care Act ("ACA") mandates that every state must have a SHOP Exchange, most only have one carrier. The plans offered on the SHOP must meet the qualifications for a small employer. Meaning, these plans must have the 10 Essential Health Benefits ("EHB's") that are not to be confused with Minimum Essential Coverage ("MEC"). These ten (10) EHB's include benefits such as Pediatric Dental Coverage, which is not required for a large employer.


Contraception and/or abortion issues on SHOP

Small group, fully insured coverage also requires an employer's plan to meet State Mandates along with the Federal requirements. And though contraception may have been preempted by the Hobby Lobby case, for non Exchange plans, it is completely unclear if the religious freedom accommodation or exemption can be extended to the SHOP Exchange.  In plain English, you are voluntarily joining the SHOP Exchange and receiving a governmental tax credit.  It has been found constitutional, many times, that rights can be given up in exchange for a tax preference.  The Hobby Lobby and Wheaton College decisions allowed for religious freedom since the government did not employ the most minimally intrusive means to accomplish its objective. Since there is no current mechanism to remove contraception and abortion coverage from the policies on the SHOP Exchange, we do not anticipate the Obama administration allowing that to occur.  We believe that they will argue that the parish had a minimally invasive method to avoid the contraception method by staying on  the diocesan plan where they would be exempt, and in addition gave up there religious freedom right in exchange for the tax credit. 

In addition, state mandates such as the new Abortion on Demand Mandate in California are not as clear. So we will assume Diocese X is located in a state with no offensive state mandates. They also trust their parish priests and their staff to purchase the same benefits at every location, fill out the tax applications, and meet the ACA mandates. Imagine the surprise when the rates from location to location vary greatly. SHOP exchanges will vary their rates based on age, and demographics, often down to the zip code.


Also, how do the locations count for people on their plans such as deacons, seminarians and religious order members? Their payroll needs to be accounted for.  What if Father is in a coma? Is he an employee of the Parish? How do locations handle transfers from one parish to another? Does Father now have to meet a waiting period, since we are saying was not an employee of the Church before he joined the new Parish?


This is all based on a theory that the new insurance purchased still has the network and benefits needed at each location.


Diocesan portability of employees and priests impacted

Now at the diocesan level we have a brand new set of problems, both Macro and Micro.  On the Macro;

  • You now have some locations set up as small businesses for insurance purposes (that must meet one set of regulations) and the rest set up as a SINGLE large employer that must meet another, unless the diocese attempts to disaggregate every location.
  • If Diocese X was self-funded, which would be the most likely scenario with over 1000 employees; they would now massively restrict their options and no longer be participating in the claims funding, keeping what was not spent on claims.
  • Options available such as not taking COBRA are now different for your 'small groups'
  • The Diocese no longer has access to claims data as that is the property of the insurance carrier and not the employer in full insured cases

In the Micro we have issues such as;

  • How to transfer employees or priests?
  • The Diocese paying an Order for a Religious employee that is on a parish plan as an unpaid employee, how does one account for that on the diocesan ACA reporting requirements?
  • How do you budget premiums when every location is paying a different premiums and for different benefits?
  • How do you transfer a lay employee from one location to another and maintain coverage without changing benefits/premium and causing a delay in coverage as that employee is considered a 'new hire' for insurance purposes and required to have a delayed effective date?
  • An employee, such as a maintenance person, that works part-time at two different parishes would be considered an FTE under the previous accounting system, is that person now disenfranchised?  Are you now subject to ERISA, have you violated the ACA, have you opened the Diocese up to a $2,000 penalty per employee, per year.  Have you violated ERISA?

There is another consequence when the Small Employer Tax Credit ends, and you want to recombine the parishes with the diocese.  You will have a mismatch of benefits, you won't have claims data, you will not have common premiums.  From an insurance perspective, going to the SHOP exchange is not wise.  Contrary to what the author of the proposed tax strategy suggests, you may not stay on the RETA exchange, because RETA is not available through the SHOP.


Employee discrimination lawsuits

If a parish goes to the SHOP Exchange, their benefits will be different than parishes that do not go to the SHOP Exchange.  Therefore two similarly situated employees could have two entirely different set of benefits and/or premiums. This could create litigation from the employees for discrimination or a reduction of benefits or increased premium:


Section 510 of ERISA, 29 U.S.C. � 1140, "It shall be unlawful for any person to discharge, fine, suspend, expel, discipline, or discriminate against a participant or beneficiary for exercising any right to which he is entitled under the provisions of an employee benefit plan, this subchapter, section 1201 of this title, or the Welfare and Pension Plans Disclosure Act  [29 U.S.C. 301 et seq.], or for the purpose of interfering with the  attainment of any right to which such participant may become entitled under the plan, this subchapter, or the Welfare and Pension   Plans Disclosure Act. 

Questions Diocesan CFO's should ask when evaluating CPA-Tax Practitioner Tax "Plan"

When we evaluate the viability of legal tax avoidance strategies, we must take into consideration not only is the strategy defensible, but also the total cost of employing the strategy.  This cost includes records retention, audit defense preparations, hiring audit defense professionals, and the damage that a CFO could incur to the trust that Diocesan leadership has placed in you.  The Diocese relies on the CFO to protect and advance the financial best-interests of the Diocese.  This includes trusting the CFO to have the wisdom not to steer the Diocese into dangerous waters in pursuit of temporary gain.  By exposing the Diocese to even the threat of a costly audit, which could result in historical and unrelated financial missteps being uncovered, the well-intentioned CFO may be neglecting the responsibility of good stewardship over the Dioceses' overall financial well-being.  When evaluating tax-avoidance "plans", it is critical for the responsible CFO to ask three important questions of the CPA/tax practitioner that proposes such strategies.


First, and foremost, is the practitioner credible?

Credibility, in this case breaks down into four sub-categories:

1)      Authority of Licensure in the required practice area.

2)      Knowledge/Education in the required area.

3)      Best Interests of the Diocese.

4)      Is the advice clouded by a financial motive

Authority of Licensure in the required practice areas

According to IRS Circular 230, a CPA/tax practitioner that gives instructions, advice or presents a "marketed opinion" without the proper disclaimer, is practicing before the IRS:


(b) Certified public accountants. Any certified public accountant who is not currently under suspension or disbarment from practice before the Internal Revenue Service may practice before the Internal Revenue Service by filing with the Internal Revenue Service a written declaration that the certified public accountant is currently qualified as a certified public accountant and is authorized to represent the party or parties. Notwithstanding the preceding sentence, certified public accountants who are not currently under suspension or disbarment from practice before the Internal Revenue Service are not required to file a written declaration with the IRS before rendering written advice covered under �10.35 or �10.37, but their rendering of this advice is practice before the Internal Revenue Service. (Circular 230 �10.3(b))


The publication of tax advice, without the proper disclaimers, would certainly be subject to scrutiny.


Best Interests of the Diocese

Since the advocate admits that he has triggered fifty audits so far, the Diocesan finance manager should factor in the total cost associated with any potential audit. Who will provide the audit defense?  Will the advocate provide it, and if so, at what cost?  If the tax-avoidance strategy is likely to trigger an audit, can the CPA/tax practitioner responsibly virtually guarantee that they can get it dismissed?  


Potential Conflict of Interest

There are further considerations about the best-interests of the Diocese when engaging a CPA/tax practitioner in a tax-avoidance "plan."  There is the question of which entity, exactly, the CPA is representing, the Diocese or the Parish.  This is a core concern, and it speaks to the inherent conflict of interest present in this "plan".  If the Parish and Diocese are unrelated, then it follows that there must be a demarcation of the CPA's representation of one of the parties.  At the very least, the CPA must have on file, prior to engaging the issue, the proper informed-consent and conflict of interest waivers.  If there is no demarcation of representation, and no waivers on file, then the CPA would seem to be acting as a representative of two parties who could have a conflict.  One could argue that if the smaller parishes are placed on the SHOP Exchange, and the larger parishes left with different insurance and premiums, then there is another potential conflict between the parishes.


It is important to understand that an actuating event need not occur for there to be a conflict of interests.  While a "mere possibility of subsequent harm" does not require disclosure and/or waiver, it is most important to address the likelihood of a conflict to arise.  If there is a history that indicates that negative consequences (such as IRS audit or investigation) are likely, then there are ample grounds for a conflict of interest to exist.  Further, in the event that an audit or investigation triggers the potential for CPA preparer penalties (which include monitoring of future activity, as well as possible criminal penalties) the immediate conflict is obvious.  The CPA/ tax practitioner could be subject to Section 6694 penalties and would no longer be able to provide unbiased practice with integrity and objectivity, as is required.


Is the Diocesan CFO potentially liable?

The Diocesan CFO could also be subject to personal scrutiny, if they have substantially participated in the preparation of the documents, even if they did not sign the documents.  Under Treas. Reg. 301.7701-15(b) (2), if the Diocesan CFO advises the preparer on a substantial portion of the preparation of the tax documents, they can be held liable as a "non-signing preparer", and subject to penalties.


Malpractice Insurance

A CPA's malpractice insurance does not extend to the unlicensed practice of law.  Nor does it cover unsolicited tax advice given to a non-client.  If one is taking a financial risk as large as the risk proposed, we would suggest asking for a copy of the malpractice insurance of the proponent of the plan.


What is there to GAIN?

After considering the credibility of the practitioner, the Diocesan CFO must properly calculate the benefits of the strategy.  The credit might not be worth, to parishes, what it appears to be worth at first glance.  The amount of the credit, although refundable for tax-exempt organizations, is defined using a complex formula on a sliding scale that diminishes downward from 35% as the number of employees exceeds 10, and gets closer to the maximum threshold of 25 FTE's.  Many companies have engaged third-party firms to assist with the exact calculation for the credit. Also, the credit is refundable but limited to payroll taxes (federal income taxes withheld, Medicare taxes withheld, and employer Medicare taxes paid) for tax-exempt organizations.  This means that if the credit applied for exceeds the applicable payroll taxes, the amount actually received by the parish will be limited to just that amount represented by the payroll taxes.


Additionally, another smaller issue is that there have been a number of credits issued that have been subject to a further reduction due to the government sequestration.  This called for an additional 7.2% reduction in the credit amount:


Sequestration only affects the refundable portion of the Small Business Health Care Tax Credit filed by tax-exempt employers.  Sequestration does not impact Small Business Health Care Tax Credit claims by employers that are not tax-exempt, as the credit is not a refundable credit for these employers. Due to sequestration, refund payments issued to certain small tax-exempt employers claiming the refundable portion of the Small Business Health Care Tax Credit under Internal Revenue Code section 45R, are subject to sequestration. This means that refund payments processed on or after October 1, 2013, and on or before September 30, 2014, to a Section 45R applicant will be reduced by the fiscal year 2014 sequestration rate of 7.2 percent, regardless of when the original or amended tax return was received by the IRS. The sequestration reduction rate will be applied unless and until a law is enacted that cancels or otherwise impacts the sequester, at which time the sequestration reduction rate is subject to change.


Affected taxpayers will be notified through correspondence that a portion of their requested payment was subject to the sequester reduction and the amount. (IRS 1)

It might be wise to engage a third-party, unrelated firm to provide an estimate of the maximum potential tax credit.  The calculations are not impossibly difficult, but certainly do require a thorough knowledge and experience with the tax code.

What is there to LOSE?

As with any aggressive tax strategy that entices IRS investigation or audit, the potential for gain, must be weighed against the risk of loss.  In this circumstance, it might be wise to consider that the IRS does not function like the courtroom TV-Dramas that dominate network programming.  With the IRS, as we are all familiar with, the burden of proof (such as proving a deduction) falls upon the taxpayer, not on the IRS.  If a deduction is questioned, the taxpayer must prove that it is relevant and applicable.  The IRS bears no burden of proof.  The CFO that ventures into the audit-inducing waters of such "plans" should also consider that without the proper handling of your audit, the IRS can find other, unrelated issues to take action on, deepening the issues at hand.

No Attorney client privileged communications or work product for CPA's


Consider the AICPA's comment below:


"...the CPA should be aware that, generally, any statements made or documents provided during the course of a civil examination can be offered against the taxpayer in a criminal prosecution" (Schlesser)


It is also important to realize that in 1984, the Supreme Court confirmed that no accountant-client privilege exists under federal law, as does with tax attorneys and their clients.

Congress enacted IRC section 7525, the so-called "accountant privilege," in 1998, which extended the common law attorney-client privilege to tax advice furnished by a federally authorized tax practitioner; however, that confidentiality privilege for accountants may only be asserted in noncriminal tax matters.  Therefore, no protection exists for the taxpayer who tells his or her CPA incriminating facts during a civil examination-that CPA can later be called as a witness against the taxpayer during a criminal prosecution. (Schlesser)


...and perhaps most concerning about the very thin protections of IRC section 7525:


As described in the House Conference Committee Report, in keeping with the common law, neither the attorney-client privilege nor the � 7525 privilege will "apply to communications and documents generated in the course of preparing [a tax] return."( H.R. CONF. REP)


Additionally, the courts have uniformly found (in both seminal cases U.S. v. Frederick, and U.S. v. Textron) that � 7525 "does not protect work product", as it does between tax attorneys with their clients. This means that any information or work product provided to or generated by a CPA/tax practitioner is not privileged communication, and can therefore be brought under the light of proceedings at will.


CFO Responsibility

It is the responsibility of the CFO to choose which strategies are simply not worth the headache, expense, and damages to the trust that is given by leadership.  When evaluating any tax strategy, you must weigh the overall benefits of the plan, the likelihood of successful defense in the case of a challenge, and the cost and risk to all parties concerned.


Our Recommendation

Our conclusion based on all the research presented, we would not recommend that a parish apply for the Small Employer Tax Credit.  However, as we said, we have no financial stake in either decision.  By giving you all this information, hopefully we have fulfilled our vocation and provide you with the details that you need to make an informed decision.  To that end, if you believe or have information that may contradict any of our points or clarifies them in any manner that we have misinterpreted them, please reach out to us, so that we can discuss and inform our clients.  Again, we are here to serve the Church, not to be "right."  We have no ego involved in our interpretations.  We are not trying to bend the law to get the answer we want, we are looking at the totality of circumstances to come to the correct result, whatever that may be.

IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).


Although I am a lawyer, the information in these slides is not to be relied on as legal advice. While I believe the information to be accurate, each individual situation is different and must be individually counseled. The information is for educational purposes only.


The content in this presentation is my OPINION and not representative of DFMC, or any other person or organization.


� Copyright Burri Insurance, LLC 2014



[2] Section 1.45R-2 defines a Qualifying Arrangement as an arrangement that requires an employer to make a nonelective contribution on behalf of each employee who enrolls in a qualified health plan offered to employees through a small business health options program in an amount equal to a uniform percentage of the premium cost of the qualified health plan. 

[3] 1.45R-1(a)(19)

 [4] Section 501 of the Code exempts from taxation "corporations, and any community chest, fund, or foundation, organized and operated exclusively for religious, charitable" purpose.  


[5] PHSA 2722.  It is unclear how this provision of the PHSA affects the exemptions for church . . . plans in ERISA and the Code.  Provisions of the Code and ERISA indicate that, if there is a conflict with a HIPAA provision in the Code or ERISA, the PHSA provision controls. 

[6] Proposed Reg. 1.414(c)-5(d). 


[7] Section 1.403(b)-2(b)(5) defines "church" as a church and a qualified church controlled organization as defined in section 3121(w)(3)(B). 


[8] P.L. 106-244, �2(b).

[9] Bercu, 87 N.E.2d 451, 452 (N.Y. 1949).

This communication and associated data and information is the exclusive property of Burri Insurance. L.L.C., Inc. all rights reserved.

TAX ADVICE NOTICE:  we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

Although I am a lawyer, the information in this letter is not to be relied on as legal advice. While I believe the information to be accurate, each individual situation is different and must be individually counseled. The information is for educational purposes only.

All of the information provided is believed to be accurate and reliable; however, Burri assumes no responsibility for any errors. Further, Burri assumes no responsibility for the use of the information provided. Burri specifically disclaims any and all liability for any claims or damages that may result from providing the information contained in this letter.

This is not a solicitation for legal services.  This is a white paper published by Burri Insurance, LLC.

The content in this letter is my OPINION and not that of any other person or organization.


IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).

Although I am a lawyer, the information in this letter is not to be relied on as legal advice. While I believe the information to be accurate, each individual situation is different and must be individually counseled. The information is for educational purposes only.

All of the information provided is believed to be accurate and reliable; however, Burri assumes no responsibility for any errors. Further, Burri assumes no responsibility for the use of the information provided. Burri specifically disclaims any and all liability for any claims or damages that may result from providing the information contained in this letter.

This is not a solicitation for legal services.  This is a white paper published by Burri Insurance, LLC.