Internal Revenue Service

On February 3, 2015, the Internal Revenue Service issued IR 2015-19, which added certain micro captive insurance companies to the IRS “Dirty Dozen” list. The IRS publishes the Dirty Dozen list to inform the public on what the Service will be focusing on and to warn tax return preparers about these same areas.

While acknowledging that these micro captive insurance companies may be legitimate, the IRS then states that many of these companies are being created and operated for tax versus business reasons. As we represent a wide array of taxpayers in the captive insurance area, let’s take a moment to outline what the IRS is looking at and what we know about the large number of examinations now underway.