Navigating Self-Directed IRAs: Steer Clear of Tax Penalties

Two men in a boat on a stormy sea. 1803 etching. Courtesy Wellcome Library, London. Wellcome Images

Two men in a boat on a stormy sea. 1803 etching. Courtesy Wellcome Library, London. Wellcome Images.

Truth and Consequences
Do an internet search for self-directed IRA and you’ll find a number of promoters promising to give you complete control over your retirement accounts. Those promises may contain a grain of truth, but don’t let exaggerated claims capsize your retirement plan. It is true that by rolling over an existing IRA or 401(k) into a self-directed IRA, you can invest in assets not offered by most IRA providers. With a self-directed IRA, you can buy almost any type of asset: an interest in a start-up, a parcel of real estate, a patent, or precious metals. It’s also true that you can continue to defer tax on gains within the IRA. However, the rules governing self-directed IRAs contain important restrictions that you should understand before you set one up—make one wrong move and you could be looking at some serious tax consequences.

The Qualified Custodian
In order to establish a self-directed IRA, a qualified custodian must be used to hold the IRA assets, maintain records, file reports, and process transactions. The custodian must be a bank or an IRS approved non-bank trustee. (The IRS publishes a list of approved non-bank trustees on its website, available at The role of the self-directed IRA custodian differs substantially from the role of conventional IRA custodians. The self-directed IRA custodian generally will not provide investment or tax advice, will not sell or recommend investment products, and will not perform due diligence to determine the suitability of any investments. The self-directed IRA account owner chooses where to invest and directs the custodian to execute each transaction.

Given the limited role of IRA custodians, the burden to maintain compliance with the laws and regulations that are applicable to all IRAs falls on the self-directed IRA account holder. Some of the most important requirements are found in Internal Revenue Code section 4975, which states that the IRA will lose its tax exempt status if the IRA engages in any prohibited transactions between the IRA and certain disqualified persons.

Disqualified Persons and Prohibited Transactions
The definition of disqualified person includes any fiduciary (such as the self-directed IRA account holder), certain members of the account holder’s family (including his spouse, ancestors, his descendants and their spouses), and business entities of which the IRA account holder owns 50 percent or more (either directly or indirectly). The IRA is prohibited from:

  • selling, exchanging, or leasing any property to a disqualified person;
  • lending money or extending credit to a disqualified person;
  • providing goods or services to a disqualified person;
  • allowing a disqualified person to use any income or assets of the IRA.

If it’s determined that a transaction is in fact prohibited, the account will cease to be a retirement account, resulting in a deemed distribution of the IRA funds, subject to taxation at ordinary rates, and possibly a 10 percent early withdrawal penalty as well. These provisions are designed to prevent any transaction that is not at arm’s length or that otherwise has the potential to harm the plan. In other words, the IRA account holder is not allowed to obtain any benefit from the IRA assets without first paying income tax. As a matter of policy, the tax favored status of IRAs is meant to encourage retirement savings and promote investment. Once any account assets are converted to personal use, the IRA is no longer a retirement account, and the IRS will expect taxes to be paid.

In some cases it won’t be entirely clear if a prohibited transaction has taken place, and the IRS may or may not decide to challenge the tax-deferred status of your IRA. The law in this area is unsettled and leaves some room for interpretation. This gives the IRS broad discretion to go after “suspicious” transactions. For example, a transaction may be prohibited even if disqualified persons are not directly involved. In one case, the United States Tax Court found that a prohibited transaction occurred when the taxpayer caused his retirement plan to lend money to three entities in which he owned a minority interest. Even though none of these entities were “disqualified persons,” the court found that the benefit to the account holder was substantial enough to violate the provisions of section 4975. See Rollins v. Comm’r, T.C. Memo 2004-260 (T.C. 2004). If you plan on using your self-directed IRA to transact business with any entity that you or any related person has an interest in, a careful analysis of the arrangement is required to ensure that it does not involve a prohibited transaction.

The Account Holder’s Burden and the Siren Song of Checkbook Control
Self-directed IRA owners must be aware of the prohibited transaction rules and other restrictions; the account custodian usually will not offer guidance as to whether a transaction is prohibited. From the perspective of the IRS, there is great potential for abuse built in to the structure of self-directed IRAs. Because taxpayers have greater control over the IRA assets and little oversight from IRA custodians, there is more opportunity for a taxpayer to benefit from the use of IRA assets without removing them from the account as part of a taxable distribution.

A relatively recent development involves the use of LLCs to give an IRA account holder checkbook control over the account assets. In order to do this, the IRA purchases a majority interest in the stock of an LLC for which the IRA account holder serves as general manager and has full authority to act on behalf of the company. The Tax Court has held that because the company does not have any membership interests when the investment is made, the company cannot be a “disqualified person” with respect to that transaction. However, if the IRA account holder receives any money or other assets from the company—whether it be a salary, loan, gift, or commission—that will be considered a prohibited transaction. See Ellis v. Comm’r, T.C. Memo 2013-245 (T.C. 2013), affirmed by Ellis v. Comm’r, 787 F.3d 1213, 1215 n.4 (8th Cir. 2015).

The idea of checkbook control is appealing to many investors, since it provides direct access to the IRA funds without having to go through the account custodian to execute transactions. In theory, the IRA account holder can do as he pleases and manage the day-to-day operations of a company that is wholly owned by his self-directed IRA. In practice, an IRA LLC can be extremely risky, even for sophisticated investors. There is little case law discussing the use of IRA LLCs, so investors must be wary of engaging in activities that could fall under the category of prohibited transactions. Though many online promoters will tell you that an IRA LLC provides you with unlimited investment opportunities, you’ll be hard pressed to find one that can offer a sound legal opinion to confirm that your investment plan meets the requirements of the Internal Revenue Code. These types of arrangements are on the IRS’s watch list, and more vigorous enforcement efforts could be lurking just beyond the horizon.

For the more adventurous investor with sufficient time, energy, and know-how, a self-directed IRA can be a good idea. If you are interested in setting one up, or already have one in place, consult with a tax attorney who knows how to avoid prohibited transactions. As you start researching assets, your attorney can also help you evaluate the legitimacy of investments that aren’t regulated by the SEC or state securities agencies. As the captain of your self-directed IRA, you are ultimately responsible for its success or failure. If you decide to take the helm without a skilled navigator at your side, be prepared to go down with your ship.

Food Trucks in a Denver Park

The Quiero Arepas food truck , one of thirty food trucks and carts at a downtown Denver park.

The Quiero Arepas food truck , one of thirty food trucks and carts at a downtown Denver park.

While in Denver to attend the IRS Nationwide Tax Forum, I went out for lunch. The hotel concierge told me of an event held in a local park with 30 different food trucks. This fit my interest in the unique and unusual.
The trucks at the downtown park on Tuesday and Thursday; I went by myself on Tuesday, and came back with my wife, Nicole, on Thursday. We didn’t have time to sample food from all the trucks, so we probably missed some terrific offerings. That said, here is a list of favorites from our two visits.


Queiro Arepas.

Queiro Arepas This widely recommended food truck serves Venezuelan food based on arepas. The arepa is a flat “bread” made from ground corn. Made from scratch in the truck, the aprepa dough is formed into a patty that is grilled, baked, split open and stuffed with a variety of ingredients. I had one filled with plantain black beans, cabbage, avocado, salsa and braised beef. It was called Pabellon and was delicious.

food-truck_03_cropStill Smokin Fusion BBQ
This truck served pulled pork sandwiches and various home-smoked pork dishes. I had a taco with peach and sweet cabbage slaw, and mojo marinated pulled pork with a peach chipotle barbecue sauce. Nice sauce with a little bite. Good flavor in the pork.

food-truck_04Pavlo’s Taste of Ukraine
This was a truck featuring Ukrainian food. I overheard him tell people that his ninety-one-year-old grandmother taught him how to cook. I chose a dish of potato and cheese vareniki (also called pierogi) with cooked onions on top. Again, this was very tasty.

Aiko Pops Popsicle
Coconut curry Popsicle. Spicy coconut; yummy and refreshing.

The Rolling Italian
Place provolone, mozzarella, Monterey jack, cheddar, and Parmesan cheeses together on a grill at a special temperature for a fabulous grilled cheese pizza. Top the pizza with your choice of with sausage, peppers, onion, ham, and eggplant. The business is a food truck called The Rolling Italian. Their tiny cannoli were also delightful.

Vegan frozen soft-serve type treats, made to order from frozen fruit. No sugar added to these delightful cold deserts. Nicole and I sampled the blackberry, banana, pineapple and the mango pineapple flavors.

Employer Alert: Take Care To Avoid ACA Pitfalls

If you are an employer, you’re aware of the confusion surrounding the implementation of the Affordable Care Act (ACA). While many of the ACA’s provisions apply only to large employers (those with 50 or more full-time equivalent employees), the Act is filled with traps for the unwary small employer as well.

One area of concern for small employers involves the broad definition of “group health plan” under IRC 9832(a). By reference to IRC 5000(b)(1), the definition of a “group health plan” includes any plan of, or contributed to by, an employer to provide health care to employees. Common employer sponsored reimbursement plans such as Health Reimbursement Arrangements (HRAs), Employer Payment Plans (EPPs), and Flexible Spending Accounts (FSAs) all fall under this definition. It’s important to note that these types of plans may overlap, so employers must use caution regardless of the type of reimbursement arrangement they have in place.

An HRA is a reimbursement arrangement funded solely by an employer to pay for employees’ qualified medical expenses, which may or may not include health insurance premiums. Employees cannot make pre-tax contributions to an HRA. Employee Payment Plans are a specific type of HRA that have been incentivized by the IRS for over 50 years. Rather than provide expensive, difficult to administer group health coverage to employees, many small employers have used EPPs to reimburse their employees for individually purchased health insurance policies. Revenue Ruling 61-146 provides that a reimbursement under an EPP is excluded from the employee’s gross income. The exclusion also applies if an employer pays employee health insurance premiums directly to the healthcare provider. The Revenue Ruling remains in effect and employees are still eligible to receive tax-free reimbursements for health insurance. But employers beware: the employee exclusion for the reimbursement comes at a high cost for the business.

IRC Section 4980D provides that an employer operating a noncomplying group health plan after January 1, 2014, must pay a tax in the amount of $100 per day for each employee covered by the noncomplying plan. Small employers are not exempt from this penalty. IRS Notice 2013-54 provides some guidance on the treatment of employer reimbursement policies. Because an HRA is considered a group health plan under IRC 9832(a), it must comply with the ACA’s market reforms, including sections 2711 and 2713 of the Public Health Services Act. Section 2711 provides that a group health plan may not establish any annual limit on the dollar amount of benefits for any individual, and Section 2713 requires that a group health plan provide coverage for certain preventive services without cost sharing. Like other Health Reimbursement Arrangements, EPPs are considered group health plans that must comply with the ACA market reforms. Under Notice 2013-54, EPPs violate the ACA’s prohibition on dollar limits because the plan benefit is deemed to be only the amount of the premium paid by the employer. Even though employees may be entitled to unlimited benefits under their individual policies, the Notice states that the EPP cannot be integrated with an individual health insurance policy. Thus, an employer who reimburses employees for individual health insurance policies is subject to the $100 per day per employee penalty.

If certain requirements are met, an employer’s payroll practices of forwarding post-tax employee wages to a health insurance provider is not considered a group health plan that is subject to the market reforms. Under this type of arrangement, no contributions can be made by the employer or any employee organization, participation in the plan must be voluntary, and the employer can receive no benefit from the program (See 29 C.F.R. §2510.3-1(j)). If an employer wishes to provide these services to employees, great care should be taken to insure that the requirements are met so that the employer does not inadvertently establish a group health plan.

Although the ACA provides that the 4980D penalty applies to non-complying group health plans after January 1, 2014, the IRS has offered limited transition relief for reimbursement plans that are not in compliance with the market reforms. Notice 2015-17 provides that small employers offering EPPs will not be subject to the penalty, at least through June 30, 2015. The Notice encourages small employers to look for group health coverage in the Small Business Health Options Program (SHOP) Marketplace, and warns that the 4980D penalty may apply beginning July 1, 2015. Republican lawmakers in the House and Senate recently introduced legislation, known as the Small Business Healthcare Relief Act, that would allow small employers to continue using pre-tax dollars to reimburse employees for health insurance premiums, but it’s far from certain that the bill will be signed into law. For the moment, employers should be on notice: reimbursement plans that were once common could result in large penalties.  If you are a small employer offering any type of “group health plan” as defined by the Affordable Care Act, you should contact your tax professional today to make sure that you are in compliance.

By |Jul 31, 2015|Categories: Tax Law|Tags: |

Ninth Circuit Denies Deductions For Marijuana Businesses

marijuana-sign-thOregon has joined the growing list of states that have legalized the sale of marijuana, but that doesn’t mean pot dealers can light up and relax. Marijuana sales may be legal in the state, but it is firmly established that Internal Revenue Code Section 280E prohibits taxpayers from deducting any expenses of a trade or business that consists of trafficking in controlled substances.

Make no mistake, marijuana is a controlled substance under federal law. This means that Oregon marijuana businesses will be forced to pay federal income tax on 100 percent of their gross profits. Unless you can classify your expenses as Costs of Goods Sold (COGS), deductions for payroll, utilities, advertising, and miscellaneous expenses will be disallowed in full. Last week, the U.S. Court of Appeals for the Ninth Circuit made clear that Section 280E applies even in states that have legalized marijuana, either for medical or recreational use.

The case, Olive v. Commissioner of Internal Revenue, No. 13-70510 (July 9, 2015), involved a medical marijuana dispensary in San Francisco called the Vapor Room. Although 100 percent of the Vapor Room’s gross income came from marijuana sales, the business also offered a variety of other goods and services at no cost. Customers could enjoy free movies, yoga, and massage therapy, as well as complementary drinks and snacks. Vapor Room staff also provided free counseling to customers on personal, legal, and health matters. The dispensary wanted to deduct not only these expenses, but also the expenses that could be directly attributed to marijuana sales.

But, because the Vapor Room’s only source of income came from marijuana sales, the court found that trafficking in a controlled substance was its only “trade or business” and disallowed all deductions for expenses incurred in its operations. Expenses for the benign, completely legal perks (like pizza and yoga) were held to be non-deductible under Section 280E because they were designed to benefit the marijuana sales business as inducements for potential customers.

This result might seem harsh, but the Ninth Circuit offered some useful guidance in its approval of a well-known 2007 Tax Court case, Californians Helping To Alleviate Medical Problems, Inc., v. Commissioner, 128 T.C. 14 (2007) (CHAMP). In that case, the court acknowledged that the taxpayer had more than one trade or business and was allowed to allocate expenses between the two. Expenses incurred in the course of care-giving (the taxpayer’s primary trade or business) were clearly deductible. All expenses attributable to the trade or business of selling marijuana, however, were disallowed. Taxpayer CHAMP, of course, charged a fee for its care-giving services and intended to make a profit from those activities. Had the Vapor Room followed suit and asked its customers to pay for the munchies, at least some of its expenses could have been deductible.

Oregon marijuana businesses take heed: If you operate a business that sells marijuana, but also offers other goods or services, work with your accountant and your tax attorney to establish the existence of a non-trafficking “trade or business.” Careful accounting procedures and appropriate business structures must be put in place to allocate expenses between the trade or business of trafficking in marijuana and any other trade or business you operate, such as care-giving or selling marijuana accessories. Without these safeguards, you put yourself at the mercy of IRS auditors who will be all too eager to allocate your expenses for you. If you are proactive, you may be able avoid the fate of the Vapor Room, which was hit with a $1.9 million tax bill as a result of inadequate planning and sloppy bookkeeping.

There is a faint glimmer of hope for the “cannabusiness” community: Oregon’s U.S. Representative Earl Blumenauer recently introduced a bill that would reverse the draconian effects of Section 280E in states that have legalized marijuana. The bill, known as The Small Business Tax Equity Act, is co-sponsored in the Senate by Oregon’s own Ron Wyden and Jeff Merkley. To date, twenty-three states and the District of Columbia have legalized medical marijuana. Voters in Colorado, Washington, Oregon and Alaska have passed measures legalizing recreational marijuana, and more states are lining up to do the same. Even so, it’s doubtful that our esteemed legislators will succeed in maneuvering the Small Business Tax Equity Act through the House and Senate, at least in the foreseeable future. In the meantime, Oregon marijuana businesses should plan for Section 280E. Contact your tax attorney to discuss steps you can take to minimize the impact of Section 280E and protect every deduction you’re entitled to.

The Trust Fund Recovery Penalty

The federal government requires that all businesses with employees withhold payroll taxes from each employee’s gross pay. These taxes, which include Social Security, Medicare, and federal income taxes, are deemed to be held by the employer “in trust” for the federal government, until the employer pays the taxes to the government each quarter. Payroll taxes are a huge burden, and can be problematic for businesses experiencing cash flow problems. When money is tight and the utility bills are due, the taxes that are supposed to be paid over to the federal government often become a lower priority. If left unpaid, trust fund taxes can be assessed against individuals who might otherwise be shielded from a company’s liabilities. The IRS is authorized to impose what is known as the Trust Fund Recovery Penalty (TFRP) on any responsible person as set out in Section 6672 of the Internal Revenue Code. This penalty is equal to the share of the employees’ payroll taxes that the business owes the IRS.

The IRS definition of responsible person is very broad— it applies to any person whose duty is to pay trust fund taxes who willfully fails to do so. A responsible person could be an officer, director, employee, or shareholder of a corporation, or a manager, employee, or member of an LLC. The term can also apply to more than one person.. Any person who has control of a business’s financial affairs, or controls payment of funds by the business, could be targeted for the TFRP.

In deciding if a person is a responsible person, the IRS considers all the facts and circumstances. Factors the IRS considers in making its determination include the individual’s ability to:

  • sign checks on behalf of the business
  • hire and fire employees
  • determine which creditors are paid
  • sign tax returns
  • manage payroll
  • make federal tax deposits.

The IRS will assess each of these factors to determine a person’s control over the payment of trust fund taxes.

What can you do if the IRS determines you are a responsible person, and thus subject to the penalty for nonpayment of trust fund taxes? You can challenge a TFRP assessment if your duties were ministerial, or if you lacked the ultimate authority to make financial decisions for the business. If, for example, you could sign checks and pay bills for the company, but were told by a supervisor which creditors to pay when the company had insufficient funds, it is unlikely the IRS would deem you a responsible person for purposes of the TFRP.

Even if the IRS has determined that you are a responsible person, you may be able to challenge the assessment if your failure to collect or pay taxes was not willful. For purposes of the TFRP, “willful” means intentional, deliberate, voluntary, reckless, or knowing. In other words, willful means that your failure to withhold or pay over trust fund taxes was not accidental. Your conduct will be deemed willful if the IRS can demonstrate that you were aware, or should have been aware, of the obligation to pay trust fund taxes and you showed an intentional disregard or indifference to the law.

Because the IRS aggressively enforces the TFRP, there are important facts you should know about it:

  • If you are liable to pay the penalty, the obligation to pay cannot be discharged in bankruptcy.
  • The IRS can collect the penalty from you, from other persons, and from the business all at the same time, until the liability is paid in full (often, the original company is no longer in business, so the IRS can only collect from responsible persons)
  • If you are found liable, the IRS may demand the entire balance from you, but you may be able to seek contribution from other responsible persons

Disputing your liability for the TFRP requires an intensive analysis of the facts. If you receive a notice from the IRS proposing an assessment of the Trust Fund Recovery Penalty, act quickly to protect your rights; contact an attorney as soon as possible.

If you’ve already been assessed with a TFRP, you still have options and may be able to limit your exposure to aggressive IRS collection tactics. In either case, regardless of where you are in the process, look for someone familiar with the Internal Revenue Code, who also knows IRS assessment and collection procedures.

By |Jul 10, 2015|Categories: Tax Law|Tags: , , , |

Osteria Francescana, Number Two in the World

Osteria Francescana. in Modena, Italy, the restaurant of highly energetic and inventive Italian chef, Massimo Bottura is rated second in the world by the Diners Club–sponsored 50 Best Restaurants Academy. Chef Bottura the subject of the Chef’s Table TV program first episode, has been referred to as the best chef in the world.  At the present time, he is without doubt the most famous and readily recognized chef in Italy.  We expected great things from our meal and were not disappointed.

We booked a room at Salloto Della Arte, a small but beautifully appointed bed-and-breakfast just one block from the restaurant. After an adventure finding parking in this old town section of Modena, we settled in to our elegant room. We took a brief tour of the city before dinner. At 8:30, we went to the restaurant where we were warmly welcomed by what must have been a half-dozen restaurant staff. As is the case with most high-end restaurants, Osteria Francescana has more than 50 staff members at work on any given night.

The menu we were presented had several options: An à  la carte section; an experimental tasting menu, and a more traditional tasting menu with dishes described in poetic, if not particularly helpful terms. We were unsure of which tasting menu would provide the best experience.  Our waiter, when presented with our dilemma, suggested a merger of items from the two tasting menus to provide us with the restaurant’s current “favorites.” This third, off-the-menu option would include a special wine paring to accompany these select dishes. This seemed an ideal resolution.

Photograph of two rabbit macaroons on a warmed white platter.

Oseria Francescana amuse-bouche: Rabbit Macaroons, the second and Nicole’s favorite of three small bites.

We started out our meal with bread and local beer: a refreshing golden ale with a light floral, hoppy tang. An amuse-bouche arrived. It consisted of three small bites, first, “Tempura with Carpione,” then, a “Rabbit Macaroon,” third, “Baccalà on a Tomato Pillow.” The tempura, of aula (a small freshwater fish) and a batter charged with nitrous oxide, was topped with a savory ‘ice cream’ made primarily from onions, vinegar, raisins and pine nuts. The rabbit macaroon was prepared with a rabbit mousse between two light, airy crackers. We both enjoyed the first two bites. The baccalà, featured in the third bite, is made from salt cured cod; I enjoyed my helping, and Nicole’s as well. The beer complemented these delightful morsels nicely.

The first plate, poetically named “Treasures from the Sea: Sustainable and Salvaged,” was made with an assortment of seafood and vegetables in a pork broth aspic. It was served with 2013 Trebbiano d’Abruzzo, a dry white wine with nice floral notes made exclusively from the trebbiano grape.  This is a common grape of Emilia-Romagna, also notable as one of the two grapes used for production of traditional balsamic vinegar.  I was again blessed with a double helping, as Nicole is not fond of unusual fish dishes and was happy to share her portion with me.

A crab, painted on the plate from dried, pulverized crab shell; the crab body is made of eggplant; crab meat, squid, fish roe, with capers and fresh herbs, cover the eggplant slice.

From Goro to Hokkaido

Next, “From Goro to Hokkaido” was placed before us.  This was another poetic name from the menu that turned out to be a beautiful dish. A crab was painted onto the plate from dried, pulverized crab shell. The base of the crab body was created from eggplant. The crab meat, some squid, fish roe, and other ocean delicacies were arranged on top of the eggplant slice with capers and various fresh herbs. The Trebbiano d’Abruzzo was continued with this dish. We both loved the creative presentation and wonderful flavors.

The “Delta of the Po Ravioli” was unique. The filling was made from cotechino, a Modenese delicacy that is the primary component of a local pork sausage of the same name. Our ravioli contained boiled pigskin (cotechino), pork and three types of lentils. The egg pasta ravioli were cooked in Lambrusco, a regional wine made from a grape of the same name, and this dish was accompanied with another crisp white wine.

Striped Red Mullet Livornese

Striped Red Mullet Livornese

We were served a French Vouvray with the “Striped Red Mullet Livornese.” The minerality of this wine, made from the Chenin blanc grape, complimented the intense tomato and fish flavors of this beautifully presented dish. An abstract of asparagus, prosciutto and peas tagliolini, dressed with threads of black truffle followed with the same delightful Vouvray wine.

Photograph of a spoon heaped with a leek preparation topped with chiffonade.

Ostera Francescana Palate Cleanser: A silky leek preparation topped with black truffle chiffonade.

As a palate cleanser, we were presented soup spoons heaped with a luscious, silky leek preparation, topped with a black truffle chiffonade. This was so delicious that we actually considered asking for a second helping.

The Damijan Podversic Ribolla Gialla, a crisp, acidic Pinot Grigio, was served with perhaps the most famous dish created by chef Buttora. “The Five ages of Parmigiano-Reggiano” presents this Italian cheese in five different stages. First, a 24-month old cheese demi-soufflé, then a warm milky cream sauce made from 30-month old cheese, a chilled foam of 36-month cheese, and a Parmigiano cracker made from crusts of a 40-month cheese, finally the crust of a 50-month cheese is turned into light ethereal bubbles as a finishing touch. Bottura describes this dish as a white-on-white portrait of the Emilia-Romagna countryside.

“The Crunchy Part of Lasagne,” another signature dish for the restaurant and chef Bottura, was served with an intense, crisp rosé that was fragrant with aromas of strawberry and red fruits. It is difficult to describe this dish but it represents the “essence” of lasagne.  It looks like a crumpled Asian cracker infused with basil and tomato flavors. The cracker is dressed with a Parmigiano béchamel and is sitting atop a succulent sous-vide cooked ragu. It is justly famous and represents everybody’s favorite part of the fresh cooked lasagna: the crispy corner.

Photograph of a slice of veal, darkly caramelized on the outside, on a white plate, spattered with red green, and brown pastes of vegetable and herb purée.

Oseria Francescana: Beautiful, Psychedelic, Spin-painted Veal, Not Flame Grilled.

We moved on to a full bodied red wine, a Nero D’Avola from Sicily, served with the “Beautiful, Psychedelic, Spin-painted Veal, Not Flame Grilled.” This was another sous-vide cooked dish that was darkly caramelized on the outside and painted with colorful and seemingly random (although carefully calibrated) pastes of vegetable and herb purée. The sous-vide method of cooking is done by immersing a sealed package in a closely controlled water bath. Meat can be cooked for hours or even days using this technique without losing flavor or texture.

Two Foie Gras Ice Cream Bar with Traditional Balsamic Vinegar from Modena, Served on a chilled silver platter

Osteria Francescana: Foie Gras Ice Cream Bars with Traditional Balsamic Vinegar from Modena

“The Foie Gras Ice Cream Bar with Traditional Balsamic Vinegar from Modena” was exactly as described. An unusual dish, served with a golden botrytis sweetened Picolit wine. Botrytis is a fungus sometimes called “noble rot” that dries out and enhances the sweetness of grapes, such as the Picolit grape, that are then used to make dessert wines. The intense syrupy and fruity wine paired beautifully with the rich foie gras and balsamic vinegar flavored ice-cream.

Sparkling Muscat was served with a salad made up of herbs and flowers. This was followed by the famous “Oops! I Dropped the Lemon Tart” desert, a dish first created when the pastry chef dropped a freshly prepared lemon tart. It is now a signature dish and work of art on a plate.  Another desert dish described with the name Vignola (a town 20 km from Modena), is an incredibly complex chocolate cherry preparation that we both found delicious and unusual. All this was followed with beautiful petits fours to complete the meal.

Chef Bottura talked with us and explained many of the dishes personally.  We brought the chef a gift and, in exchange, were given a cookbook personally inscribed by Massimo and his principal kitchen staff.  As a special treat, we had our picture taken in the kitchen with the star chef and he key staff.

By |Jun 17, 2015|Categories: Food Adventures|Tags: |