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On April 10, 2023, the Internal Revenue Service (“IRS”) issued proposed regulations further tightening the circle around micro-captive insurance…
Friday, April 9, 2021 On April 9, 2021, the IRS urged taxpayers who engage in micro-captive insurance arrangements to exit these transactions. This announcement follows an IRS victory in the U.S. Tax Court, which found that such arrangements are not eligible for the tax benefits claimed. The IRS had previously issued settlement initiatives following victories in Tax Court. IRS Wins in Tax Court On March 10, 2021, the U.S. Tax Court held in Caylor Land & Dev. v. Commissioner, T.C. Memo. 2021-30 (2021), that a micro-captive arrangement failed to qualify as insurance for federal ta...
IRS Urges Participants in ‘Abusive’ Micro-Captives to Get Out Now April 9, 2021 Internal Revenue Service officials are again urging participants in “abusive” micro-captive insurance arrangements to exit these transactions as soon as possible. The IRS considers that many micro-captive arrangements are not really about insurance. The IRS has stepped up examinations of these arrangements in recent years. In 2020, the agency deployed 12 micro-captive examination teams to substantially increase the examinations of ongoing abusive micro-captive insurance ...