What’s Adequate Risk Distribution After Recent Trilogy of Captive Tax Cases? | Bennett Thrasher Skip to main content
search
What’s Adequate Risk Distribution After Recent Trilogy of Captive Tax Cases?

What’s Adequate Risk Distribution After Recent Trilogy of Captive Tax Cases?

by Scott Lawrence

By January 2, 2020September 18th, 2021Insights

In three recent cases, the U.S. Tax Court found related-party insurance companies (captive insurance companies) didn’t sufficiently distribute risk to allow the insured parties to deduct their premium payments. In an article recently published by Bloomberg Tax, Laurie Bizzell of Bennett Thrasher analyzes the cases, the court’s historical view and the IRS’ position to find there is no conclusive definition of risk distribution.  However, there is an opportunity for taxpayers to present facts that will challenge the IRS to determine what is more important; the number of  independent risk exposures or a specific number of insured entities.

The full Bloomberg Tax article can be found here.

Learn More

For more information on captive insurance, contact Laurie Bizzell by calling 770.396.2200.