Utah Microcaptive Blocked From Suing Over Federal Tax Denial

A Utah microcaptive insurance company can’t sue the federal government for denying it tax exemptions, the US Court of Appeals for the Tenth Circuit said Monday.

The Anti-Injunction Act bars cases intended to restrain tax collection or assessment, and so prohibits Standard Insurances’ lawsuit, Judge Timothy M. Tymkovich wrote for the court.

The company contested the government’s arguments that it isn’t a legitimate captive insurance entity and so can’t deduct its income and premiums on federal returns. It also said the government wrongfully obtained internal documents during its audit.

Both arguments fail to overcome the AIA and the Declaratory Injunction ...