IRS attacks captive insurance, how to get audited, 3577 views, 66 likes Published on No why there is a need for additional insurance, the IRS will perceive d information gathering tool employed by the IRS to survey a large grouping of transactions to identify which arrangements fall within the transaction of interest scope should be listed and/or examined.
Recommended by Forbes MOST POPULAR Photos: The Richest Person In Every State +820,455 VIEWS Best 'Cyber Monday' 2016 Deals: Amazon, Apple, Best Buy, Target And Walmart The MacallanVoice: Next Big Sound Empowers Musicians With Big Data
Notice 2016-66 is very broad. Generally, the notice applies to transactions where: (i) the taxpayer owns directly or indirectly an interest in an active trade or business, (ii) the business enters into insurance contracts whereby an insurance company that has made an election under Code Section 831(b) (the microcaptive) insures or reinsures risks covered by the insurance contracts, (iii) the taxpayer, the insuring business, or persons related to either of them own 20% or more (by vote or value) of the microcaptive, and (iv) one of the following tests are met – (a) the microcaptive’ s combined losses and expenses over a prior five-year period are less than 70% of the net premiums earned, or (b) during the past five years, the captive used its assets to loan, guarantee, or otherwise help in any financing for the taxpayer, the insuring business, or any person related thereto.
Significantly, the new IRS notice requirement is triggered by objective requirements. Very importantly, no tax avoidance motive or intent is required for a transaction to be subject to the notice and the reporting obligations that flow therefrom. Accordingly, the IRS notice will require disclosure of countless 831(b) captive insurance arrangements that fulfill all the requirements of the Internal Revenue Code beyond a shadow of a doubt.
IRS attacks captive insurance, how to get audited, 3577 views, 66 likes
ReplyDeletePublished on November 18, 2016
LikeIRS attacks capt
IRS attacks captive insurance, how to get audited, 3577 views, 66 likes
ReplyDeletePublished on No why there is a need for additional insurance, the IRS will perceive d information gathering tool employed by the IRS to survey a large grouping of transactions to identify which arrangements fall within the transaction of interest scope should be listed and/or examined.
Recommended by Forbes
MOST POPULAR Photos: The Richest Person In Every State
+820,455 VIEWS Best 'Cyber Monday' 2016 Deals: Amazon, Apple, Best Buy, Target And Walmart
The MacallanVoice: Next Big Sound Empowers Musicians With Big Data
Notice 2016-66 is very broad. Generally, the notice applies to transactions where: (i) the taxpayer owns directly or indirectly an interest in an active trade or business, (ii) the business enters into insurance contracts whereby an insurance company that has made an election under Code Section 831(b) (the microcaptive) insures or reinsures risks covered by the insurance contracts, (iii) the taxpayer, the insuring business, or persons related to either of them own 20% or more (by vote or value) of the microcaptive, and (iv) one of the following tests are met – (a) the microcaptive’ s combined losses and expenses over a prior five-year period are less than 70% of the net premiums earned, or (b) during the past five years, the captive used its assets to loan, guarantee, or otherwise help in any financing for the taxpayer, the insuring business, or any person related thereto.
Significantly, the new IRS notice requirement is triggered by objective requirements. Very importantly, no tax avoidance motive or intent is required for a transaction to be subject to the notice and the reporting obligations that flow therefrom. Accordingly, the IRS notice will require disclosure of countless 831(b) captive insurance arrangements that fulfill all the requirements of the Internal Revenue Code beyond a shadow of a doubt.