News & Analysis as of September 13, 2024

Tax Court

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Tax Court Upholds IRS Decision That Premiums Paid to Microcaptive Insurance Companies Did Not Qualify for Tax Deductions

Carlton Fields on 4/23/2024

The U.S. Tax Court recently upheld a determination by the IRS that premium payments to certain microcaptives could not be deducted for tax purposes because the premium payments were not actually for “insurance.”...more

U.S. Tax Court Finds Captive Insurer Is Not an “Insurance Company” Under the Internal Revenue Code

Carlton Fields on 7/26/2018

In this case, Reserve Mechanical Corp. (“Reserve”), a captive insurer incorporated under the laws of Anguilla, sued the Commissioner of Internal Revenue in the U.S. Tax Court regarding the Commissioner’s findings of $477,261...more

Tax Court Disallows Deductions For Payments To Captive Insurance Company

Carlton Fields on 11/7/2017

A husband and wife who paid $1.54 million in premiums to their captive insurance company and $720,000 in premiums to another insurer over two years, almost all of which ended up back in their bank accounts, have had their tax...more

Takeaways from the Tax Court's First Micro-Captive Insurance Ruling

Holland & Knight LLP on 10/9/2017

• The U.S. Tax Court recently ruled in Avrahami v. Commissioner, the first litigated Tax Court case involving an 831(b) captive insurance company. • The Tax Court held that two of the key factors that define "insurance"...more

Tax Court Issues Opinion Striking Down Captive Insurance Arrangement

Fox Rothschild LLP on 8/28/2017

The Tax Court has issued its long-awaited decision addressing captive insurance arrangements. In Avrahami v. Commissioner, 149 T.C. No. 7 (2017), the Tax Court held that payments made from a number of businesses owned by the...more

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