The IRS is thinking broadly about how to resolve remaining cases involving abusive insurance schemes, its top lawyer said after the agency announced the results of a settlement deal tied to the transactions.
The agency in 2019 offered a settlement to a limited number of taxpayers who participated in “micro-captive” insurance arrangements—schemes involving small insurers that can choose to pay tax only on their investment income under a perk in the tax code. The IRS has stated (Notice 2016-66) that the deals have the potential for tax avoidance or evasion, and said taxpayers involved must disclose the transactions. ...
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