The captive insurance arrangement has been targeted by the IRS in recent years. An autumn court win is a highlight in this long-running battle; it is a victory not only for the captive taxpayer but also for the captive insurance industry.
Puglisi Egg Farms, an owner of a 831(b) captive insurance company, argued that the taxes and fees leveled by the IRS were unfair and unsubstantiated. The IRS decided to drop the fees and taxes before the decision would be announced by the court.
This comes on the heels of a May decision by the US Supreme Court that the IRS does not have special privileges that other government agencies also do not have.
We are pleased to see these cases land on the side of the captive companies. Congratulations to Puglisi Farms. To read more, click here.