IRS Targets Micro-Captives: Participants Should Act Now
Certain small or “micro” captive insurance company transactions (“micro-captives”) remain a high-priority enforcement issue for the Internal Revenue Service (“IRS”). After success in court, the IRS offered two time-limited settlement opportunities to certain micro-captive participants. Future IRS settlement opportunities will be less favorable to taxpayers. Targeted micro-captive participants should consult an independent tax advisor and take steps now to assess and mitigate their exposure.