Captive Insurance Company -- IRS Audits and Litigation

Atlanta, Georgia tax attorney Cal Bomar and the attorneys at Bomar Law Firm, LLC assist clients who are undergoing an audit relating to a captive insurance company.

Each year, the IRS lists a "Dirty Dozen" list of items that it considers abusive. This year, it has included the abusive use of "micro" captive insurance companies.

The IRS is specifically targeting those who market it as a way to reduce a Taxpayer's tax burden.

The IRS is seeking to argue that some of these entities do not provide real insurance, and therefore the IRS should be able to assess tax against the captive and it's insured. They will also seek penalties against promoters that are setting up these captives.

The analysis of whether insurance exists often considers whether risk-shifting and risk-distribution exist. Taxpayers will seek to show that the parties conducted themselves in manner consitent with the standards applicable to an insurance arrangement between two unrelated parties.

The IRS will be litigating captive insurance companies for the foreseeable future. For a detailed analysis of your captive insurance audit or case, call Bomar Law Firm at (404) 841-6561. Cal Bomar is a former IRS Chief Counsel Attorney who represents taxpayers in captive insurance cases, as well as other tax controversies.