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Watchdog Urges IRS to Beef Up Reviews of Micro-Captive Audits

April 22, 2022, 5:40 PM

The IRS could improve how it reviews its audits and investigations of small offshore insurance companies that the government believes can be used to evade taxes, the Government Accountability Office said Friday.

The IRS pushed back on the GAO’s contentions, saying its procedures in the area are sufficient and that it shouldn’t divert its limited resources to try to do more.

  • In a report, the GAO recommended that the IRS clarify its guidance on audits of “micro-captive” insurance companies and establish a formal review system for investigations. Micro-captives, small insurance companies owned by the businesses they insure, can ...