Current Tax Issues with Captive Insurance Companies

07-May-2019

Beckett G. Cantley & F. Hale Stewart, Current Tax Issues with Captive Insurance Companies, The Business Lawyer (ABA Business Law Section), January 2014 (online edition). Summary: In this article published with the American Bar Association, Prof. Cantley and F. Hale Stewart provide an overview of several current IRS compliance issues with captive insurance companies. Current Tax Issues with Captive Insurance Companies | Business Law Section

Risks Posed by the IRS Offshore Crackdown and Recent Case Law to International IRC 831(b) Captive Insurance Companies

07-May-2019

Beckett G. Cantley & Bruce G. Luna, Captive Insurance Company Premium Loan Backs: Proper Investment or Improper Return of Capital?, Captive Visions Magazine (March 2014). Summary: This article by Profs. Cantley and Luna discusses the risks inherent in a captive insurance company (CIC) loaning paid-in premiums back to the joint owners of the CIC and insured business. CIC Premium Loan Backs Proper Investment or Improper Return of Capital?

Captive Insurance Company Premium Loan Backs: Proper Investment or Improper Return of Capital?

07-May-2019

Beckett G. Cantley & Bruce G. Luna, Captive Insurance Company Premium Loan Backs: Proper Investment or Improper Return of Capital?, Captive Visions Magazine (March 2014). Summary: This article by Profs. Cantley and Luna discusses the risks inherent in a captive insurance company (CIC) loaning paid-in premiums back to the joint owners of the CIC and insured business. CIC Premium Loan Backs Proper Investment or Improper Return of Capital?

Can An 831(b) Captive Become An Impermissible Virtual IRA?

07-May-2019

Beckett G. Cantley, Can an IRC § 831(b) Captive Insurance Company Become an Impermissible Virtual IRA?, Captive Visions Magazine (July 2014). Summary: This article published in Captive Visions Magazine discusses how the IRS may take issue with investments being the driving force for the formation of a captive insurance company (CIC). Can An 831(b) Captive Become An Impermissible Virtual IRA?

What is Anti-Avoidance Law, and How Might it be Used by the IRS?

07-May-2019

Beckett G. Cantley & F. Hale Stewart, What is Anti-Avoidance Law, and How Might it be Used by the IRS?, Captive Visions Magazine (October 2014). Summary: In this article published in Captive Visions Magazine, Prof. Cantley and F. Hale Stewart discuss the basic tenets of anti-avoidance law, as well as some of the ways the IRS might apply them to the captive insurance industry. What is Anti-Avoidance Law, and How Might it be Used by the IRS?

IRS Loses Captive Insurance Case on Good Taxpayer Facts

07-May-2019

Beckett G. Cantley & F. Hale Stewart, IRS Loses Captive Insurance Case on Good Taxpayer Facts, Tax Notes (November 17, 2014). Summary: In this Tax Analysts article, Prof. Cantley and F. Hale Stewart discuss why they believe the next wave of captive litigation cases will be more fruitful for the IRS, and why practitioners should be cautious. Tax Notes, Nov. 17, 2014

The IRS & SFC Anti-§ 831(b) Actions: Targeted or Broad Based?

07-May-2019

Beckett G. Cantley & F. Hale Stewart, The IRS & SFC Anti-§ 831(b) Actions: Targeted or Broad Based?, Captive Visions Magazine Online (February 2015). Summary: In this article published in Captive Visions Magazine Online, Prof. Cantley and F. Hale Stewart discuss the recent listing of certain captive transactions on the IRS Dirty Dozen list as well as the U.S. Senate Finance Committee hearings on captive insurance. Many of the issues were addressed during the ABA roundtable discussion on Monday, March 2nd.

Summary: The Final Legislative Changes to IRC 831(b)

07-May-2019

In this article, Beckett Cantley provides explanation of the legislative changes, specifically geared around the two new definitional terms as well as the key addition to IRC 831(b).

Relearning the Lesson: IRS Judicial Doctrine Attacks on the Captive Insurance Company Pre-Planned Tax Deductible Life Insurance Tax Shelter

07-May-2019

Beckett G. Cantley, Relearning the Lesson: IRS Judicial Doctrine Attacks on the Captive Insurance Company Pre-Planned Tax Deductible Life Insurance Tax Shelter, 14 Hous. Bus. & Tax L.J. 181 (2014). Summary: There are certain members of the life insurance industry that are in perpetual pursuit of the ultimate potential driver of life insurance sales---tax-deductible life insurance premiums. Some in this industry have previously used aggressive retirement plan funding, and numerous other tax vehicles for these purposes, but in the end the IRS has always succeeded in defeating such strategies through administrative enforcement and litigation. The latest attempt to achieve tax-deductible premiums is the formation of a small business captive insurance company (“CIC”) for the pre-planned purpose of using the CIC funds to invest in life insurance. The owner of a small business forms an IRC § 831(b) CIC, and pays a presumably tax- deductible premium to the CIC for business risk insurance issued by the CIC. Subsequently, the CIC uses a significant part of the tax-free premium immediately to purchase life insurance on the common owner of the small business and CIC. In general, life insurance premiums are not deductible as ordinary and necessary business expenses, and tax-deducted funds should not be used to purchase life insurance. The IRS is likely to view the CIC created and funded for the primary purpose of purchasing personal life insurance for its owner, as an abusive tax shelter.

IRS Torpedoes: Results of Over a Decade of Promoter Shenanigans in 831(b) Captive Insurance

07-May-2019

Beckett G. Cantley & Geoffrey C. Dietrich, IRS Torpedoes: Results of Over a Decade of Promoter Shenanigans in 831(b) Captive Insurance, The Journal Entry (July 2018).