Taxation
The Tax Investigation of Small Captives and Their Providers: Where is it Going?
American businesses are increasingly using captive insurance companies to underwrite their insurance needs, and then having the captives acquire excess or catastrophic coverage. Upwards of 75 percent of new captives formed after 2005 were simply tax shelters where mere lip service was given to the captive's insurance function. Now, the IRS and U.S. Senate Finance Committee are being compelled to act.