Automotive News Announces:IRS changes could ensnare dealers who reinsure!

Fear Not!

In an article dated May 15th, 2013, Automotive News announced that IRS changes could ensnare dealers who reinsure. (See full article http://www.autonews.com/article/20130515/FINANCE_AND_INSURANCE/1305...)

Tim Byrd, President of Tim Byrd & Associates, Inc. a managing agency specializing in Dealer-owned Reinsurance Companies, does not see anything to be concerned about. TB&A dealers with dealer-owned reinsurance companies use reinsurance tax experts such as David Kaseff, the reinsurance tax expert for the MarksNelson Vohland Campbell Radetic accounting firm in Kansas City, Mo., who says in the article that the IRS changes were targeted at U.S. taxpayers with foreign accounts who may be trying to improperly avoid U.S. taxes. That description, he says, doesn’t apply to dealer-owned reinsurance companies located overseas because the tax benefits are the same whether a reinsurance company is overseas or in the United States.

Dealer-owned reinsurance companies are domiciled offshore primarily because capitalization requirements are low compared to a domestic insurance company, and audit and reporting requirements are a lot easier and cheaper. NOT because of tax benefits. As Kaseff pointed out, whether your reinsurance company is domiciled offshore or in the United States the tax benefits are the same.

Dealers do have to comply with this new Foreign Account Tax Compliance Act ruling, which amounts primarily to filing an additional form with your tax return to indicate to the IRS that you have nothing to hide.  Tim Byrd says, Dealers who have surrounded themselves with great advisers such as MarksNelson and Tim Byrd & Associates, Inc are not hearing about this for the first time in an article.

It is important to remember that car dealers are not the target of this rule change and by adhering to the proper reporting requirements, dealers will avoid potential fines or loss of tax benefits.

 

About Tim

Tim Byrd is founder and president of Tim Byrd & Associates

Inc. located in Gloucester, Virginia. An auto industry expert on

Dealer-owned Reinsurance Companies, Buy Here Pay Here operations and F&I development. A Best Selling Author and Speaker, Tim is a 25-plus-year veteran of the car business, and a trusted adviser to many car dealers. Tim is married and has five beautiful children. Tim has been featured in Virginia Independent News, Special Finance Insider, DealerElite, Around the Commonwealth, Dealer Business Journal and is co-author of the #1 Best Selling Book “Unfair Advantage”.

 

 

Website: www.timbyrd.net

Blog: www.timbyrd.net/blog

Facebook: www.facebook.com/reinsurance101

Twitter: www.twitter.com/TimByrdRE1

LinkedIn: www.linkedin.com/pub/tim-byrd/34/3b9/56a

Email: timbyrd@timbyrd.net

7319 Martin Street, Suite 4

Gloucester, VA 23061

Phone: 804-824-9533

 

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