Captive insurance compliance is critical today as the U.S. tax landscape morphs and the IRS increases its scrutiny into the structure and function of 831(b) captive insurance companies.
When operated correctly, captive insurance companies (CICs) provide clear benefits and generally do not invite IRS scrutiny. However, some CICs elect to engage in one or more of the IRS “hot button” practices, potentially exposing them to legal risk.
Cantley Dietrich attorneys are nationally recognized experts in matters of CIC compliance. We assist captive insurance companies with compliance issues, helping them avoid potential challenges from the IRS.
The Ever-Changing Captive Compliance Standards
Issues related to CIC compliance are highly complex and ever-evolving. The predominant threats to compliance previously involved the shifting and distribution of risk. Today, other pressing concerns involve the tax loophole created by CIC investments in life insurance, loans made to shareholders or insureds, and gray areas involving CIC ownership by entities set up to benefit the descendants of the primary insureds.
CICs domiciled offshore have also come under greater scrutiny of late, due to tax evasion concerns.
The tax compliance attorneys at Cantley Dietrich help clients navigate this complex area of the law. We advise them on how to restructure and operate their CIC to reduce their exposure to legal liability and ideally avoid attracting the scrutiny of U.S. tax authorities.
Maintaining Captive Insurance Compliance
Like virtually all tax-related matters, being in compliance today is not a reliable indicator of your compliance status a year from now.
As a relationship-oriented firm, we maintain regular contact with our clients and revisit captive compliance issues as often as necessary. With each tax code modification and legal decision that affects captives, your risk of non-compliance resurges. So although we may get you where you need to be now, continued vigilance is necessary.
We can also assist you in improving operational and administrative aspects of your captive, to allow you to take better advantage of the many benefits a CIC legal provides, such as access to the reinsurance market.
Nationally Recognized Captive Insurance Compliance Experts
The tax compliance attorneys at Cantley Dietrich have a comprehensive understanding of these complex legal matters. We speak and publish on these issues and consult with members of the U.S. House Ways and Means Committee to ensure we remain ahead of the knowledge curve.
Beckett Cantley co-authored the leading legal text for the captive insurance industry, “U.S. Captive Insurance Law,” and has been published in Tax Notes Today along with multiple law review journals. With Geoffrey Dietrich, Mr. Cantley has written multiple authoritative articles.
Contact Cantley Dietrich to learn more about how our firm can assist you with matters of captive insurance compliance.