Dissecting the Avrahami ruling: The impacts on the captive insurance industry

In the first Section 831(b) case to make it to trial (i.e., Avrahami vs. Commissioner, 149 T.C. No. 7), the U.S. Tax Court backed the Internal Revenue Service (IRS) by ruling that the taxpayer’s micro-captive insurance company and risk-pooling arrangement did not constitute insurance and thereby cannot be respected as such. In what is considered a big case for the micro-captive insurance industry and risk-pooling arrangements, taxpayers should use the insight provided to re-examine current structures and arrangements. View this on-demand webinar as Baker Tilly’s insurance and IRS practice and procedural professionals dissect the Avrahami ruling and what it could mean for the captive insurance industry going forward.

Key takeaways

  • The key facts present in the Avrahami court ruling, including micro-captive structure and funding
  • The breakdown of the positions taken by the IRS and insight to be gained from the ruling
  • What this court ruling could mean for the captive insurance industry
  • The key takeaways for micro-captive arrangements

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For more information on this topic, or to learn how Baker Tilly’s insurance and IRS practice and procedural professionals can help, contact our team.