Regulators in the Lone Star State have warned consumers against doing business with an organization that offers to trade what it calls a “tax-deductible installment plan” for a variety of assets.
The Texas Department of Insurance says it has issued a cease-and-desist order to the National Foundation of America in connection with allegations that the company has engaged in the business of insurance in Texas without having a license in Texas.
Representatives for National Foundation were not immediately available for comment on the Texas action.
The Tennessee secretary of state Web site shows that National Foundation was incorporated as a nonprofit corporation in Tennessee in January 2006 and filed an annual report April 1.
National Foundation says on its Web site that the installment plan it offers is based on Section 453 of the Internal Revenue Code and can be used to replace annuities, real estate, bonds, securities and cash with an arrangement that can produce “guaranteed income that grows each year” while lowering taxable income by up to 50%.
National Foundation “has solicited at least 26 licensed insurance agents in Texas to sell its purportedly tax-deductible annuities,” Texas regulators say in an announcement of the cease-and-desist order.
The Texas department has received information showing that National Foundation “does not have charitable tax-exempt status” in Texas, officials say.
At least 39 Texas residents have transferred annuities to National Foundation, officials report.
Regulators in Florida, Iowa and Washington have issued their own cease-and-desist orders against National Foundation, and at least 9 other states are conducting National Foundation investigations, Texas officials report.