The US Internal Revenue Service (IRS) has added abusive micro-captive arrangements to the final version of its 2022 "Dirty Dozen" list of potentially abusive tax schemes. Earlier in June, the IRS had included foreign captive insurance arrangements on the first installment of entrants on this year's Dirty Dozen list.
Foreign captive insurance transactions found a place on the Internal Revenue Service's 2022 "Dirty Dozen" list of potentially abusive tax arrangements. The IRS said the four arrangements on the first group on its 2022 list "will likely attract additional agency compliance efforts in the future."
The US Government Accountability Office (GAO) has recommended that the Internal Revenue Service (IRS) clarify guidance on offshore micro-captive insurance audits and establish a formal review system for investigations. A GAO statement detailed the findings of its study into how the IRS conducts its enforcement of offshore insurance compliance issues.
A federal judge has granted a summary judgment motion filed by CIC Services in its case against the Internal Revenue Service (IRS), vacating IRS Notice 2016-66. The judge held that the IRS violated the federal Administrative Procedures Act in adopting the notice, and was arbitrary and capricious in doing so.
A coalition of 10 captive insurance associations filed an amicus brief this month in support of an appeal brought by the Delaware Department of Insurance in the case of United States of America v. State of Delaware Department of Insurance.
The US Internal Revenue Service’s (IRS) office of chief counsel plans to hire up to 200 additional attorneys to focus on abusive tax schemes, including abusive micro-captive arrangements. The IRS said the attorneys will help it manage the increasing caseload in its multiyear effort to stamp out abusive tax schemes.
Captive insurance can be a powerful risk management and risk financing tool, but those considering forming a captive must avoid potential pitfalls. A recent report from Ernst & Young LLP outlines five potential pitfalls prospective captive owners should be aware of to ensure long-term captive success.