Avrahami Panel: “A Captive Is Not a Piggy Bank”
From: Captive.com/IRMI, March 26, 2018
In the wake of the Avrahami decision, micro-captives have found themselves on the Internal Revenue Service (IRS) 2018 “Dirty Dozen” tax scam list for the fourth year in a row. (See IR-2015-26, IR-2016-025, IR-2017-31, and IR-2018-62.) An Avrahami panel at the Captive Insurance Companies Association conference provided beneficial insights for small captive insurers. (For the details of the Avrahami case, watch Insights into the Avrahami and Feedback Decision.)
The panelists said that taxpayers should distinguish their facts from Avrahami and emphasized that the facts and intent surrounding the creation and operation of a captive insurance company are important.