An IRS regulation on microcaptive insurance arrangements is an unfair campaign against companies that use them, in violation of the Administrative Procedure Act, a Texas company said Wednesday in a new lawsuit.
Drake Plastics Ltd.—which owns its own captive insurance company—said the practice"is now at risk of extinction by administrative fiat” because of the rule and continuing IRS audits of microcaptive companies. The company’s lawsuit filed in the US District Court for the Southern District of Texas seeks an order vacating the rule and blocking its enforcement.
The rule, published in January, deems such arrangements or substantially similar arrangements as ...
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