831(b) Institute praises Congressional letter to IRS on micro captives
The 831(b) Institute has recognised a group of US members of the House of Representatives for their recent letter to Internal Revenue Service (IRS) Commissioner Daniel Werfel expressing their support for small captive insurance.
Representative Van Duyne and the other members of the House Ways and Means Committee wrote the letter to the Commissioner.
The 831(b) Institute said that legislative awareness and action is necessary to provide clarity and ensure compliance with the 831(b) tax code and that the lack of guidance provided by the IRS on 831(b) plans is unfair and targets small business owners acting in good faith on the laws Congress passed. Many of the points raised by this group of legislators are critical to ensuring that this valuable tool is available to small businesses in the coming economically difficult years ahead.
As stated in the letter, “The IRS may not eliminate laws that it finds inconvenient to administer or somehow troublesome, nor may it legislate via regulation.” This approach from the IRS is not only lackadaisical, but also dangerous to small businesses. The letter went on to state that, “Treasury and the IRS are harming the American economy by their misguided effort to eradicate small captive insurance.” The Institute agrees that the current actions of the IRS are both unjustified and harmful.
Peter Dawson, advisor to the 831(b) Institute, said: “The letter written by the House Ways and Means Committee correctly points out the duty the IRS has in implementing the will of Congress and acknowledging the flaws in their current approach to regulating micro captives.” He went on to say that, “Legislative action and advocacy to the federal government (administrative/executive branch) is essential to protect the future of 831(b) plans and small business owners in America as desired by Congress.”
The 831(b) Institute added that it hopes the IRS will heed the counsel as outlined in the letter and work with Congress to build a stronger framework and clear legislation that sets out attainable and concise guidelines for small business owners and micro captive insurance. The collaboration by both parties in Congress, small business owners, and the IRS will be necessary to build a meaningful micro captive insurance program that helps current and future generations and helps protect jobs.
The Institute concluded by saying that it is grateful to the members of the House Ways and Means Committee for their aid in this vital endeavour.
