Microcaptives catch the eye of the IRS—again

Earlier this year the Internal Revenue Service (IRS) published proposed regulations relating to microcaptives, a document that gave many observers of microcaptives more than a bit of déjà vu.

The IRS document, titled “Microcaptive Listed Transactions and Microcaptive Transactions of Interest”, seeks to identify transactions that are the same as, or substantially similar to, certain microcaptive transactions as listed transactions, a type of reportable transaction, and certain other microcaptive transactions as transactions of interest, another type of reportable transaction.

It’s not the first time that the IRS has tried to opine on microcaptives and the last time this happened it ended up in litigation, with the IRS coming off second best.

Now, however, they have made another attempt and in an article in Captive International’s 2023 US Focus we look at the situation in more detail, setting out what’s at stake for the microcaptive sector.

To read the rest of this article free in Captive International's US Focus 2023 edition, click here.