Advocating for Captive Insurance

April 16, 2021 – SIIA Advocates Balanced IRS Approach to Captive Insurance, U.S. Business Needs.  The IRS recently issued IR 2021-82, in which it urges participants in abusive micro-captives to exit such structures.  The announcement comes as the U.S. Tax Court ruled against the taxpayer in the Caylor Land case.  To date, the IRS has been successful in limiting cases tried to those whose facts favor the Service and are not reflective of the industry.  Thus, creating a negative bias at the examination level of the IRS.  The Self-Insurance Institute of America, Inc. (SIIA) continues to be supportive of curbing abusive practices within the industry and urges participants within potentially abusive transactions to heed the IRS’ advice.  At the same time, it is important to note that the vast majority of captive participants are utilizing the structure to protect themselves against appropriate risks, as the tax code intended.

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