The Self-Insurance Institute of America (SIIA) has hit out at Internal Revenue Service, accusing it of misleading people in its recent announcement about rooting out tax evasion in the micro captive sector.
SIIA dismissed the IRS’ claim that 80 percent of taxpayers receiving its settlement offers accepted them as misleading. That figure related to those that “agreed to participate and consider a settlement, not actually settle,” it said.
“Those taxpayers can indeed settle, but also have the option to go to court. In fact, it is SIIA’s understanding that, to date, not a single captive has engaged in a final settlement agreement, making such an announcement premature,” SIIA added.
Meanwhile CIC Services, a member of SIIA, described the same IRS communication as “bullying”.
CIC said: “[The IRS statement] is another bullying effort by the Service to try to scare middle market business owners from acting in the best interest of their companies and the employees that rely on them.”
SIIA said it is “supportive of curbing abusive practices within the industry,” but added: “It is important to note that the vast majority of captive insurance participants are not only doing the right thing.”
The body called for “appropriate regulatory oversight that does not overreach in its cost and scope, and which focuses on actual abusive practices versus those industry participants doing the right thing.”
SIIA added: “Congress and others continue to be concerned about the resources being invested in this issue by the IRS, considering the size of the industry and scope of potential abuse.”
Self-Insurance Institute of America, SIIA, Internal Revenue Service, IRS, CIC Services, Micro captives