25 May 2016Actuarial & underwriting

Capstone adds tax expert to captive management team

Capstone Associated Services has added Paula Little to its captive management team.

Little has 25 years of tax experience to Capstone. She is the liaison on federal and state tax-related matters with the tax and corporate lawyers at The Feldman Law Firm.

One of Little's first projects is to work with the lawyers at Capstone's affiliated law firm in addressing needed changes in 2017 captive ownership structures in connection with the ‘Protecting Americans from Tax Hikes (PATH) Act of 2015’.

This 2015 legislation raised the cap on Internal Revenue Code Section 831(b) electing captives to $2.2 million, which is then inflation-adjusted, from the previous $1.2 million cap, having been unchanged since 1986. Also, the 2015 PATH Act limited an electing captive's ability to have disparate lineal family ownership relative to the insureds.

While not acting as a CPA (financial adviser) directly for clients, Little will be serving Capstone, which provides comprehensive administration for captives and their owners throughout the US.

She joins five others at Capstone and The Feldman Law Firm who successfully passed the CPA exam along with the firm's dozen lawyers. Capstone's team is bolstered by its two in-house chartered property & casualty underwriters (CPCUs) and three persons holding the designation of ‘associate in risk management’, all in addition to another person holding an "associate in claims" designation.

Little’s previous tax experience includes roles as a tax CPA at BDO (formerly Mann Frankfort), PWC, and Duke Energy.

"Capstone has long been recognised as having the broadest and deepest talent pool in the captive industry," said Steve Cohen, the head of The Feldman Law Firm's tax department. "With the addition of Paula, Team Capstone is bringing added talent to its deep bench, drawing on our law firm's resources in identifying and resolving tax, corporate, and regulatory issues."

Stewart Feldman, Capstone's chief executive officer and general counsel, added: “Our experience is seen in our success over the years in maintaining compliance with both domicile regulators and in tax reviews of various sorts.

“Whether it was the three wins in tax court on captive matters in 2014 or the more than 50 'no change' Internal Revenue Service (IRS) audits or favourable tax rulings, we are proud of the diligent approach that our team has taken over the years. As the IRS and state regulators have become more active, sophisticated clients have gravitated towards Capstone for true turnkey solutions as their outsourced, captive provider.”

He continued: “Our clients are referred from other law firms, CPA firms, large financial institutions, and other discriminating referral sources."

Logan Gremillion, tax lawyer with The Feldman Law Firm, commented: "Most captive managers simply provide clerical or administrative services. An increasing part of our work involves taking on new clients whose captives are in trouble, with clients realising all too late that their 'captive manager' wasn't doing what was represented, leaving the client in a lurch when a problem arose.

“We don't know of another captive group in the country that takes responsibility for tax, corporate, insurance, and regulatory matters and which takes responsibility for federal audit defense. We have the team to do what is needed. Paula's role is in furtherance of our objective of minimising problems early on."