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alliantgroup’s Steven Miller and Dean Zerbe Participate in ABA Captive Insurance Roundtable

HOUSTON, TX. MARCH 4, 2015 – On Monday, March 2, former IRS Acting Commissioner and alliantgroup National Director of Tax, Steven Miller, and former Senior Counsel to the U.S. Senate Finance Committee and alliantgroup National Managing Director, Dean Zerbe, participated in a roundtable discussion hosted by the American Bar Association (ABA). Joined by seven other experts in the realm of captive insurance, the panel reviewed a number of recent actions taken by the IRS as well as the Senate Finance Committee in regards to micro captive insurance companies.

While the tax code allows for captive insurance companies – providing businesses an alternative to managing risk – it is important that companies are engaged in purchasing actual insurance that is appropriately priced. The IRS is actively examining several companies that market captive insurance to small and medium businesses as well as those business owners that form captive insurance companies.

“The IRS is looking hard at captive insurance to make sure it looks and acts like insurance,” said Miller while discussing the IRS’s review process. “alliantgroup is representing before the IRS a number of companies that have utilized captive insurance and it is clear that the IRS wants to understand how the captives are promoted and marketed as well as administered.”

During the hour-long roundtable, the panel discussed the addition of micro captive insurance abuse to the IRS’s “Dirty Dozen” scams list for 2015, the proposed amendments to Section 831(b) and Senator Charles Grassley’s (R-IA) request that the U.S. Treasury Department “perform a study on the abuses of captive insurance for estate planning purposes.” Combined all together, the panel concluded that these actions point to a renewed emphasis on micro captive insurance compliance and highlighted the need for both micro captive owners and providers to be up to date on the latest regulations, case law and other guidance. During the presentation, the panel noted that several audits of micro captive providers and their clients were already underway and confirmed that more audits will be coming as the IRS increases its enforcement activities.

“Treasury has placed captives on their priority guidance list and the Senate Finance Committee has already asked Treasury for feedback on rumored abuses with a requested report,” said Miller. “Companies that have utilized captive insurance want to get ahead of this and make sure their operations are in order and not wait until the IRS calls.”

“With captives on the Dirty Dozen list it is clear that the IRS and Congress’ interest as to captive insurance is quite broad – including use of captives for estate tax, life insurance and other tax planning. Having an actuary or a piece of paper from the state insurance commissioner isn’t going to be enough to get a company past an IRS audit,” said Dean Zerbe, National Managing Director of alliantgroup.

A division of alliantgroup, alliantNational assists CPAs and U.S. businesses alike in navigating difficult tax matters, offering both representation and support while working with IRS and state tax officials. Comprised of a world class team of former IRS executives, congressional staffers, technical experts and experienced litigators, alliantNational provides support in a number of specialized areas, including audit and credit defense, captive insurance companies, controversy services, domestic and international tax planning and tax exempt services. Led by the experience of former IRS executives Steven Miller, Mark W. Everson and Kathy Petronchak and former Senior Counsel to the Senate Finance Committee Dean Zerbe, alliantNational has the knowledge and experience to help CPAs and their clients successfully navigate the tax code.