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Lance Wallach

Prognostications on Captives

 

Grounds for IRS challenges


Given the substantial tax benefits associated with a captive insurance company, it is not
Surprising that the IRS has challenged certain aspects of Captives over the years. The primary
arguments for those challenges are: 

(1) The Captive is not writing "insurance" in the usual sense, due to a lack of risk shifting
and risk distribution. 

(2) Excessive premiums are being paid. 

Consequently, it is critical that a Captive not only be formed and administered correctly, but also
that it issue true insurance to its affiliates.

Lance Wallach, CLU, ChFC, CIMC, speaks and writes extensively about financial planning, retirement plans, and tax reduction strategies.  He is an American Institute of CPA’s course developer and instructor and has authored numerous bestselling books about abusive tax shelters, IRS crackdowns and attacks and other tax matters. He speaks at more than 20 national conventions annually and writes for more than 50 national publications.  For more information and additional articles on these subjects, visit www.vebaplan.com, www.taxlibrary.us, lawyer4audits.com or call 516-938-5007.

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