Artist Can Proceed With Microcaptive Challenge in Tax Court

Renowned artist Sterling Ruby will be able to litigate a $900,000 tax dispute over the legitimacy of his microcaptive insurer in the US Tax Court because the IRS notice of deficiency was valid.

The US Tax Court denied an IRS motion to dismiss for lack of jurisdiction a petition brought by Series JU of Oxford Insurance Co., which petitioned the court last year.

Series JU—owned by a trust controlled by Ruby and connected to his studio, Sterling Ruby Studio Inc.—disputed about $773,676 in income tax deficiencies for 2016 and 2017, pus $154,675 in penalties. The IRS disallowed alleged premiums paid ...