Oxford’s Response to IRS Proposed Transactions of Interest


On Monday, April 10, 2023, Treasury and the IRS issued proposed regulations identifying certain captive insurance arrangements as “Listed Transactions” within the meaning of the Internal Revenue Code.  The proposed regulations also retain the classification of some captive insurance arrangements as “Transactions of Interest” under the Code.

Oxford’s attorneys are reviewing the proposed regulations and considering what impact they may have.  Preliminarily, however, it appears that the proposed regulations will not significantly increase the tax reporting and disclosure obligations that various participants in our captive insurance arrangement have already had since 2016, when the IRS first identified certain captive insurance arrangements as “Transactions of Interest.”  Indeed, some participants (such as indirect owners of insureds) may have a reduced compliance burden.

Further, even if the new proposed regulations are finalized without change, their impact on the substantive law governing captive insurance arrangements will be minimal.  Oxford will of course continue to comply with all disclosure and reporting requirements applicable to it.  Participants who continue to comply with their reporting obligations likewise should see little change in the IRS’s positions on the merits or proposed penalties if the regulations are finalized.