U.S. CAPTIVE INSURANCE LAW
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  • Basic Information
    • Who Should Form a Captive?
    • Convert To A Pure Captive
    • How We Work
  • Following the Rules
    • Introduction to Anti-Avoidance Law
    • Substance Over Form
    • Sham Transaction
    • Step Transaction Doctrine
    • The Economic Substance Doctrine
  • Articles
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"We help entrepreneurs protect what they’ve already earned so they can continue to grow"​


​
​Tax Analysts Series on Captive Insurance


The Tax Analysts Service -- the leading tax analysis service in the country -- has asked us to write a concise history of captive insurance litigation, in addition to commenting on current issues related to captive insurance.  

The Captive Insurance Case Law Timeline Series

The Captive Insurance Case Law Timeline: The IRS Victories, published November 3, 2014
The Captive Insurance Timeline: The Tide Turns for Taxpayers, published March 16, 2015
The Captive Insurance Timeline: The Risk of Risk Distribution, published October 19, 2015

Other Articles on Captives

IRS Loses Case on Good Taxpayer Facts, published November 17, 2014
Captive Guidance After the "Dirty Dozen" Listing, published June 8, 2015


The RVI Case: Court Deference To State Regulators & Outside Advisers Blunts The IRS Attack
cv_issue_7_cantley_stewart.pdf
File Size: 625 kb
File Type: pdf
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The Use of Captive Insurance in the Medical Services Industry
medical_company_use_of_cic_.pdf
File Size: 358 kb
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The Use of Captive Insurance In the Financial Services Industry
This article originally appeared in the Journal Journal of Taxation and Regulation of Financial Institutions.

the_use_of_captive_insurance_companies_in_the_financial_services_industry.pdf
File Size: 373 kb
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Presentation To the Montana Captive Insurance Conference
The Evolving Tax Environment for Captive Insurance Companies.

mt_slides_7-15-15.pptx
File Size: 124 kb
File Type: pptx
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Recent Presentations

Below are the slides from our recent presentation to the American Conference Institute's Captive Insurance Conference, which took place in New York City on April 23-24, 2014.   We explained how the subjective and objective factors of the economic substance doctrine apply to captives, along with the status of recent IRS enforcement actions.

stewart_aci_slides.pdf
File Size: 611 kb
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cantley_aci_slides.pdf
File Size: 621 kb
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Captive Visions e-Magazine

Beckett and Hale are regular contributors to the Captive Visions eMagazine, available from CaptiveGlobal.com

Beckett G. Cantley & F. Hale Stewart Captive Guidance After the 'Dirty Dozen Listing," Tax Analysts, June 6, 2015

This article uses recent IRS pronouncements to determine permissible captive structures.
post_dirty_dozen_planning.pdf
File Size: 156 kb
File Type: pdf
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Relearning the Lesson: IRS Judicial Doctrine Attacks on the Captive Insurance Company Pre-Planned Tax Deductible Life Insurance Tax Shelter

Beckett G. Cantley  Houston Business and Tax Law Journal, 2015, Forthcoming

relearning_the_lesson.pdf
File Size: 497 kb
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Beckett G. Cantley & F. Hale Stewart, The IRS & SFC Anti-§ 831(b) Actions: Targeted or Broad Based?, Captive Visions Magazine Online (February 2015).

Summary: In this article published in Captive Visions Magazine Online, Prof. Cantley and F. Hale Stewart discuss the recent listing of certain captive transactions on the IRS Dirty Dozen list as well as the U.S. Senate Finance Committee hearings on captive insurance.

irs-sfc-broad-based_.pdf
File Size: 83 kb
File Type: pdf
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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).


Summary: In this article published in the Cayman Financial Review, Prof. Cantley discusses several of the current IRS compliance issues specifically facing captive insurance companies formed in foreign jurisdictions.

risks-posed-by-the-irs-offshore-crackdown-and-recent-case-law-to-international-irc-831b-captive-insurance-companies.pdf
File Size: 434 kb
File Type: pdf
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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).

Summary: In this article published in Captive Visions Magazine, Prof. Cantley and F. Hale Stewart discuss the basic tenets of anti-avoidance law, as well as some of the ways the IRS might apply them to the captive insurance industry.

what-is-anti-avoidance-law-and-how-might-it-be-used-by-the-irs.pdf
File Size: 332 kb
File Type: pdf
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Beckett G. Cantley, Can an IRC § 831(b) Captive Insurance Company Become an Impermissible Virtual IRA?, Captive Visions Magazine (July 2014).


Summary: This article published in Captive Visions Magazine discusses how the IRS may take issue with investments being the driving force for the formation of a captive insurance company (CIC).

virtual_ira.pdf
File Size: 5797 kb
File Type: pdf
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Beckett G. Cantley & Bruce G. Luna, Captive Insurance Company Premium Loan Backs: Proper Investment or Improper Return of Capital?, Captive Visions Magazine (March 2014).

Summary: This article by Profs. Cantley and Luna discusses the risks inherent in a captive insurance company (CIC) loaning paid-in premiums back to the joint owners of the CIC and insured business. March 2014

loan_backs.pdf
File Size: 2348 kb
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Beckett G. Cantley & F. Hale Stewart, Current Tax Issues with Captive Insurance Companies, The Business Lawyer (ABA Business Law Section), January 2014 (online edition).


Summary: In this article published with the American Bar Association, Prof. Cantley and F. Hale Stewart provide an overview of several current IRS compliance issues with captive insurance companies.

current-tax-issues-with-captive-insurance-companies-business-law-section.pdf
File Size: 346 kb
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Repeat as Necessary: Historical IRS Policy Weapons to Combat Conduit Captive Insurance Company Deductible Purchases of Life Insurance


Beckett G. Cantley  U. C. Davis Business Law Journal, Vol. 13, 2013

repeat_as_necessary.pdf
File Size: 219 kb
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Beckett G. Cantley, Steering Into the Storm: Amplification of Captive Insurance Company Compliance Issues in the Offshore Tax Crackdown, 12 Hous. Bus. & Tax L.J. 224 (2012).
 

Summary.  This article provides: (1) a discussion on the compliance issues surrounding the use of CICs; (2) a detailed discussion of the progression of the IRS offshore crackdown; (3) an analysis of the rationales for choosing an offshore jurisdiction for forming a CIC; and (4) a discussion of the IRS crackdown’s potential negative effect on the choice to utilize an offshore IRC § 831(b) CIC.

steering_into_the_storm.pdf
File Size: 624 kb
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Beckett G. Cantley, The Forgotten Taxation Landmine: Application of the Accumulated Earnings Tax to IRC § 831(b) Captive Insurance Companies, 11 Rich. J. Global L. & Bus. 159 (2012).
 

Summary.  This article discusses: (1) the requirements, benefits, and tax attributes of an IRC § 831(b) captive insurance company (“CIC”); (2) an overview of the Accumulated Earnings Tax (“AET”) and the reasonable needs test which must be met to avoid the AET; and (3) the potential future application of the AET to an IRC § 831(b) CIC and the negative results that could arise if the IRS chooses to do so.  Given that the IRS has yet to announce any policy about applying the AET to combat the growth of this popular tax arrangement, this article seeks to analyze how the IRS may prospectively make use of this tool and how CIC owners and managers should conduct themselves to not run afoul of the IRS.


forgotten_landmine.pdf
File Size: 113 kb
File Type: pdf
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  • Welcome
  • Basic Information
    • Who Should Form a Captive?
    • Convert To A Pure Captive
    • How We Work
  • Following the Rules
    • Introduction to Anti-Avoidance Law
    • Substance Over Form
    • Sham Transaction
    • Step Transaction Doctrine
    • The Economic Substance Doctrine
  • Articles
  • Blog
  • About US