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Downs Rachlin Martin PLLC

Captive Insurance Update | Issue 2 | 2025

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Every year, the members of the Vermont Captive Insurance Association’s legislative committee and the Vermont Department of Financial Regulation (the “DFR”) work to improve Vermont’s captive insurance laws and regulations....more

ArentFox Schiff

Health Care Provider Loses Tax-Exempt Status in Fifth Circuit Decision

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On October 28, the US Court of Appeals for the Fifth Circuit held that a nonprofit corporation that coordinates health care for privately insured patients does not qualify for tax exemption under Section 501(c)(4) because it...more

Downs Rachlin Martin PLLC

What Connelly v. United States Means for Closely-Held Businesses

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The US Supreme Court recently issued a significant decision, impacting many closely-held businesses with buy-sell agreements funded by life insurance policies, Connelly v. United States, 144 S. Ct. 1406 (2024). In a 9-0...more

Carlton Fields

Tax Court Upholds IRS Decision That Premiums Paid to Microcaptive Insurance Companies Did Not Qualify for Tax Deductions

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The U.S. Tax Court recently upheld a determination by the IRS that premium payments to certain microcaptives could not be deducted for tax purposes because the premium payments were not actually for “insurance.”...more

Carlton Fields

Tax Court Rejects Captive Insurance Company Status Under 501(c)(15)

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Petitioner, a captive insurer domiciled in Anguilla, applied to be a tax-exempt small insurance company under IRC section 501(c)(15), and filed returns on this basis, making an election under IRC section 953(d)....more

Carlton Fields

New Jersey Tax Court Finds That Companies For Which New Jersey Is The Home State Must Pay Taxes On All Premiums Paid To Captive...

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A tax court judge in New Jersey has handed Johnson & Johnson (J&J), and likely other New Jersey-based businesses that operate captive insurers, a significant loss in an opinion interpreting the federal Nonadmitted and...more

Carlton Fields

U.S. Tax Court Finds Captive Insurer Is Not an “Insurance Company” Under the Internal Revenue Code

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In this case, Reserve Mechanical Corp. (“Reserve”), a captive insurer incorporated under the laws of Anguilla, sued the Commissioner of Internal Revenue in the U.S. Tax Court regarding the Commissioner’s findings of $477,261...more

Latham & Watkins LLP

Recent Developments in the W&I Insurance Market

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Increased competition among insurers and improved policy terms suggest the W&I insurance market is becoming more favourable to investors. In real estate transactions, buyers and sellers naturally pursue conflicting...more

Carlton Fields

Tax Court Disallows Deductions For Payments To Captive Insurance Company

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A husband and wife who paid $1.54 million in premiums to their captive insurance company and $720,000 in premiums to another insurer over two years, almost all of which ended up back in their bank accounts, have had their tax...more

Holland & Knight LLP

Takeaways from the Tax Court's First Micro-Captive Insurance Ruling

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• The U.S. Tax Court recently ruled in Avrahami v. Commissioner, the first litigated Tax Court case involving an 831(b) captive insurance company. • The Tax Court held that two of the key factors that define "insurance"...more

Fox Rothschild LLP

Tax Court Issues Opinion Striking Down Captive Insurance Arrangement

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The Tax Court has issued its long-awaited decision addressing captive insurance arrangements. In Avrahami v. Commissioner, 149 T.C. No. 7 (2017), the Tax Court held that payments made from a number of businesses owned by the...more

Carlton Fields

Court Upholds Attorney-Client Privilege Despite Advice Of Counsel Defense In Tax Case Involving Reinsurance Transaction

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This case involves a tax dispute centering on whether certain “purported” insurance and reinsurance transactions “lacked economic substance.” Following an in camera review of communications identified in Respondents’...more

Morrison & Foerster LLP

MoFo New York Tax Insights - Volume 7, Issue 7

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ALJ holds NYS Real Estate Transfer Tax Cannot Be Imposed on Sale of 45% Membership Interest in LLC - In an issue of first impression under the New York State real estate transfer tax, a New York State Administrative Law...more

Troutman Pepper Locke

New York State Clarifies Taxation of Unauthorized Insurance Companies

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Three recent decisions (March 3, 2016) by a New York State Division of Tax Appeals administrative law judge help to clarify the taxation of unauthorized insurance companies subject to New York State taxation. New York...more

McDermott Will & Emery

Plain and Simple: Maryland Tax Court Holds Insurance Company is Exempt from Corporate Income Taxes

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Although taxpayers often complain that complying with the tax laws imposed by the numerous state and local taxing jurisdictions that exist in the United States is a burdensome process, many of these tax statutes also provide...more

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