831(b) Institute joins push for IRS rule extension

The 831(b) Institute has submitted a letter to acting IRS Commissioner Melanie Krause on April 7 calling for an extension on the agency’s January 14 regulatory requirements for Section 831(b) of the Internal Revenue Code. 

The submission, sent on April 7, means that the 831(b) Institute is joining the efforts of state captive insurance associations nationwide in pushing for the extension.

According to the 831(b) Institute these new regulations, 26 CFR 1.6011-10 and 1.6011-11, require micro-captive owners electing under Section 831(b) to file disclosures with the Office of Tax Shelter Analysts by April 14 if they have loss ratios below a stated amount or if they have engaged in specific types of financial transactions in the past decade.

“These regulations provide only 90 days for affected micro-captive industry members to review their financial statements and determine if the disclosures apply to their operations,” said Dustin Carlson, president of the 831(b) Institute. “Due to their size, small businesses are not afforded the same resources to provide the capital or manpower needed to adequately respond to these time-sensitive demands, especially when overlapping with the already-busy April 15 tax filing deadline.”

Extending the reporting deadline would provide small businesses and micro-captive owners an additional 90 days to respond to the disclosure requirements, granting additional capacity to adequately and thoroughly research, report, and meet the requirements, the 831(b) Institute said.

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