Captive Insurance Expert Witness

Captive Insurance Expert Witness: Beckett Cantley

Professor Beckett Cantley is one of the nation's leading legal authorities on U.S. Captive Insurance and serves as an expert witness in captive insurance company litigation matters. Mr. Cantley is now available as an expert witness in captive insurance company litigation matters.

One of the Nation's Leading Experts on Captive Insurance Law

Professor Cantley is the former American Bar Association (ABA) Taxation Subcommittee Chairman for the Captive Insurance Committee. He has given numerous speeches and published dozens of articles on Captive Insurance issues over the last decade and has served as an expert witness in multiple high-profile captive cases. Mr. Cantley has given speeches on CIC throughout the U.S. and published dozens of articles on captive insurance issues over the last decade. His captive insurance law review articles have made him a Top 10% all-time downloaded author on the Social Science Research Network (SSRN).

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.

The Ever-Changing Captive Compliance Standards

Issues related to CIC compliance are highly complex and ever-changing. 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. Captive insurance companies domiciled offshore have also come under great scrutiny due to tax evasion concerns.

Nationally Recognized Captive Insurance Compliance Expert

Published nationally in scholarly journals, newspapers, financial and accounting firm periodicals
  • Ranked in the top 10% downloaded scholarly articles for legal research on the Social Science Research Network
  • Authored the leading legal text for the captive insurance industry
  • Ranked in the top 10% downloaded scholarly articles for legal research on the Social Science Research Network
Professor of Tax Law
  • Northeastern University's Taxation Graduate Program
Frequent speaker on taxation
  • Captive insurance, estate planning, and international transaction issues
  • Awarded Excellence in Legal from IBMTV

One of the Nation’s Leading Experts on Captive Insurance Law

  • U.S. Captive Insurance Law by Beckett G. Cantley and F. Hale Stewart This is the first book on captive insurance that informs the reader on all aspects of forming and running a captive insurance company and explains the tax issues associated with them. The reader is taken through an entire case law history of captive insurance to understand the issues related to forming a captive insurance company.
  • Beckett Cantley, Steering into the Storm: Amplification of Captive Insurance Company Compliance Issues in the Offshore Crackdown, Hous. Bus. & Tax L. J. 224 (2012).
  • Beckett Cantley, The Forgotten Taxation Landmine: Application of the Accumulated Earnings Tax to I.R.C. § 831(b) Captive Insurance Companies, 11 Rich. J. Global L. & Bus. 159, 160 (2012), 163.
  • Beckett G. Cantley, Repeat as Necessary: Historical IRS Policy Weapons to Combat Conduit Captive Insurance Company. Deductible Purchases of Life Insurance, 13 U.C. Davis Bus. L.J. 1 (2012).
  • Beckett G. Cantley, Relearning the Lesson: IRS Judicial Doctrine Attacks on the Captive Insurance Company Pre-Planned Tax Deductible Life Insurance Tax Shelter, 14 Hous. Bus. & Tax L.J. 181 (2013).
  • Beckett G. Cantley, Promoter Analysis: Captive Insurance Companies, Utah Association of Certified Accountants Professional Resources (September 15, 2013).
  • Beckett Cantley, F. Hale Stewart, Current Tax Issues with Captive Insurance Companies, ABA Bus. L. Today, February 2014, 1.
  • Beckett G. Cantley, Risks Posed by the IRS Offshore Crackdown and Recent Case Law to International IRC 831(b) Captive Insurance Companies, Cayman Financial Review (January 15, 2014).
  • Beckett G. Cantley, Can an IRC § 831(b) Captive Insurance Company Become an Impermissible Virtual IRA?, Captive Visions Magazine (July 2014).
  • Beckett G. Cantley, Captive Insurance Company Premium Loan Backs: Proper Investment or Improper Return of Capital?, Captive Visions Magazine (March 2014).
  • Beckett G. Cantley & F. Hale Stewart, What is Anti-Avoidance Law, and How Might it be Used by the IRS?, Captive Visions Magazine (October 2014).
  • Beckett G. Cantley & F. Hale Stewart, IRS Loses Captive Insurance Case on Good Taxpayer Facts, Tax Notes (November 17, 2014).
  • Beckett G. Cantley & F. Hale Stewart, The IRS & SFC Anti-§ 831(b) Actions: Targeted or Broad Based?, Captive Visions Magazine Online (February 2015).
  • Beckett Cantley and F. Hale Stewart, Captive Guidance After The 'Dirty Dozen' Listing, Tax Notes, June 8, 2015, p. 1191 (2015).
  • Beckett G. Cantley & F. Hale Stewart, The Captive Insurance Timeline: The Tide Turns for Taxpayers, Tax Notes (March 19, 2015).
  • Beckett G. Cantley & F. Hale Stewart, The Captive Insurance Timeline: The Rise of Risk Distribution, Tax Notes (March 19, 2015).
  • Beckett G. Cantley & F. Hale Stewart, The Avrahami Case: IRS Lays Out its Captive Abuse Arguments, Captive Visions (January 2016).
  • Beckett G. Cantley & F. Hale Stewart, Summary: The Final Legislative Changes to IRC 831(b), Captive Global (January 2016).
  • Beckett G. Cantley & F. Hale Stewart, Captive Insurance: Raising the Limit and Closing a Perceived Abuse, Tax Notes (February 10, 2016).
  • Beckett G. Cantley & Geoffrey C. Dietrich, IRS Torpedoes: Results of Over a Decade of Promoter Shenanigans in 831(b) Captive Insurance, The Journal Entry (July 2018).
  • 
Beckett G. Cantley & Geoffrey C. Dietrich, Aftermath: IRS & Private Litigation in Captive Insurance Companies, Tax Notes (October 2018).
  • Beckett G. Cantley & Geoffrey C. Dietrich, House of Cards: The Implosion of the Bleeding Edge 831(b) Captive Industry, IRMI Captive Insurance Company Reports (February 2019).
  • Beckett G. Cantley & Geoffrey C. Dietrich, Calculating Captive Insurance Company Settlement Initiative Benefits, Tax Notes (August 3, 2020).
  • Beckett G. Cantley & Geoffrey C. Dietrich, FAQ: Anti-Avoidance Law & Estate Planning with Captives, SSRN (October 8, 2020)
  • Beckett G. Cantley & Geoffrey C. Dietrich, FAQs: Captive Insurance Companies, SSRN (October 8, 2020)
Presentations on Captive Insurance Issues
  • University of Houston Law School, International Taxation Issues Symposium (2012).
  • Brigham Young University Law School, Current Issues in Taxation & Captive Insurance Company Law (2012).
  • ABA Committee on Captive Insurance Companies, Hot Tax Topics in Captive Insurance (2013)
  • ABA Business Law Section Spring Meeting, Captive Insurance and Organizational Risk Management: Issues and Solutions (2014).
  • Western Regional Captive Insurance Conference, Uncertain Landscape: The Investment Uses and Abuses of IRC 831(b) Captive Insurance Companies (2014).
  • ACI News York Conference, Captive Taxation Issues (2015).
  • IBM.TV, Captive Insurance & Conservation Easement IRS Enforcement (2020).
Media Quotations on Captive Insurance Issues
  • "Tax Court Ruling Gives Boost to Captive Insurers" published on Law 360, Lexis-Nexis, on January 22, 2014.
  • "Life Insurance and the 831(b) Captive Insurance Company – Wait For the Test Case Before Signing Up" published in Forbes Magazine on April 20, 2014.

On April 9, 2021, IRS urges participants of abusive micro-captive insurance arrangements to exit from arrangements.

 "In multiple cases before the courts, judges have held that these 'fanciful' and 'unreasonable' arrangements don't add up to insurance in the commonly accepted sense," said IRS

WASHINGTON — Internal Revenue Service officials today urged participants in abusive micro-captive insurance arrangements to exit these transactions as soon as possible.

The IRS has stepped up examinations of these arrangements and has recently won yet another case in U.S. Tax Court that such arrangements are not eligible for the tax benefits claimed.

On March 10, 2021, the U.S. Tax Court held in Caylor Land & Dev. v. Commissioner, T.C. Memo. 2021-30 (2021), that yet another micro-captive arrangement failed to qualify as insurance for federal tax purposes. This decision follows several earlier Tax Court decisions that also confirmed the IRS's determinations that certain micro-captive arrangements were not eligible for the claimed federal tax benefits. In Caylor, the Tax Court also sustained the IRS's determination of accuracy-related penalties and rejected the taxpayer's claim of reliance on tax advice.

irs.gov/newsroom

What is an IRC § 831(b) Captive Insurance Company?

An Internal Revenue Code (IRC) § 831(b) small captive insurance company (CIC) is, in essence, a corporation formed to offer insurance to a parent corporation or other affiliated entities. The CIC may offer administrative and tax benefits over self-insurance and commercially available insurance. The IRS didn’t like this idea from the beginning, arguing that the captives formed by these companies weren’t insurance companies. And while their argument might seem specious, it wasn’t without merit. When captives started, the law didn’t have a working definition of “insurance company.” This made it easy for the IRS to legitimately argue these new companies weren’t insurance companies under the law. In fact, a strong argument can be made that captive insurance litigation helped to provide the law with a formal and very well-developed definition of “insurance company.” As of today, the IRS is aggressively attacking these insurance vehicles.

When captives started, the law didn’t have a working definition of “insurance company.” This made it easy for the IRS to legitimately argue these new companies weren’t insurance companies under the law. In fact, a strong argument can be made that captive insurance litigation helped to provide the law with a formal and very well-developed definition of “insurance company.”

—Beckett Cantley Author, “US Captive Insurance Law”

Captive Insurance: Expert Witness