Micro captives granted one month extension to respond to IRS letter
The Internal Revenue Service has extended the due date to respond to its letters of inquiry to certain micro-captive insurance participants.
Micro captives now have until June 4 to respond to the IRS letter, an extension of one month on the original May 4 deadline. The step comes in response to the COVID-19 pandemic. The IRS made the announcement in a statement to a tax reporter on April 22, according to the law firm Greenberg Traurig.
The IRS’ original letter called for recipients to advise the IRS if they are no longer claiming deductions or other tax benefits for covered micro-captive insurance transactions. It had warned that recipients that did not respond by the due date could be referred for examination, which could result in a full disallowance of claimed micro-captive insurance benefits and imposition of applicable penalties and interest.
The IRS urged business owners to call the IRS hotline phone number contained in its original letter if they need additional time beyond June 4 to provide a written response.