IRS Prevails in Lawsuit Challenging Insurance Transaction Notice

May 22, 2019, 10:21 PM

A lawsuit challenging an IRS effort to crack down on micro-captive transactions was properly dismissed by a lower court, the Sixth Circuit ruled May 22.

CIC Services LLC, a Knoxville, Tenn., firm, was acting as an adviser to taxpayers participating in micro-captive transactions when the Internal Revenue Service issued Notice 2016-66 to identify certain types of these transactions as reportable for tax purposes. Failure to report them on a tax return would result in significant penalties.

Captive insurance companies are formed as subsidiaries to insure the risks of a corporate parent. A micro-captive is an insurance company ...

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