From: Captive Insurance Times
Micro captives were not listed on the Internal Revenue Service’s (IRS) 2020 ‘Dirty Dozen’ list of tax scams, for the first time in five years.
The annual list is a compilation of a variety of common scams that the IRS suggests represent “the worst of the worst tax scams” and should be avoided by taxpayers.
For the last five years, the IRS has referred to micro captives as an “abusive tax shelter” and suggested that certain micro captive “structures, promoters, accountants or wealth planners persuade owners of closely-held entities to participate in schemes that lack many of the attributes of insurance”.
Although micro captives were not mentioned on the IRS’ official list, it did state that an upcoming series of releases will be published on topics such as abusive micro captives and fraudulent conservation easements.