Captive
Structure |
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IRS
Revenue Ruling 2001-31 |
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In this ruling, the IRS abandoned
the "economic family" doctrine which the Service
used to attack captive planning. |
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UPS
v. Commissioner, 254 F.3d 1014 (11 Cir. 2001) |
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In this significant
case, the taxpayer's tax motivation for forming
a captive was upheld in a $2 billion victory for
the tax payer. |
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Humana,
Inc. v. Commissioner, 881 F.2d 247 (6th Cir. 1989) |
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In this landmark case, the
Service lost its "economic family" argument. |
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Kidde
Industries v. U.S., 40 Fed. Cl. 42 (1997) |
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Holds that Humana case applies
to brother-sister subsidiaries and not divisions. |
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IRS
Revenue Ruling 2002-89. |
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In this ruling, the IRS determined
that where a captive derives 50% of its premiums
from underwriting its parent's risks (with the
other 50% of premium revenue from unrelated parties),
there was sufficient risk distribution to constitute
"insurance". |
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IRS
Revenue Ruling 2002-90. |
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In this pronouncement, the
IRS ruled that a captive which insured 12 subsidiaries
of a common parent, with no unrelated insurance
underwriting, had sufficient risk distribution
to constitute "insurance". |
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IRS
Revenue Ruling 2002-91. |
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In this ruling, the IRS determined
that if within a group captive no one member's
covered risks exceeded 15% of the group's total
risks, then that captive possessed sufficient
risk distribution to constitute "insurance". |
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IRS
Revenue Procedure 2002-75. |
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In this publication, the IRS
announced that it will now consider ruling requests
on the tax treatment of captives. |
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IRS
Notice 2002-70. |
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In this November 2002 pronouncement,
the IRS announced that captive transactions utilizing
certain reinsurance arrangements (so-called "PORCs")
resulting in shifting of income will be "listed
transactions" for purposes of Reg. Sec. 1.6011-4. |
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| Tax Shelter
Disclosure Regulations. |
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These regulations
were first published 3/2/00
as temporary regulations requiring corporate taxpayers
to make appropriate disclosure if it engages in
either: (i) a "listed transaction" as
defined; or (ii) a transaction that reduces taxes
by $10 million and that meets 2 of 6 other criteria
-- unless that transaction is in ordinary course
of business. These regulations were modified on
8/16/00, on
8/7/01, and
on 6/18/02
to include non-corporate taxpayers. Revised temporary
regulations were published on 10/22/02,
effective 1/1/03, and expanded to require disclosure
if a transaction meets any one of six criteria.
Final regulations,
published and effective 2/28/03, basically follow
the revised temporary regulations published on
10/22/02. |
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State
Independently Procured Premium Taxes |
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Dow Chemical Company v. Carole Keeton Rylander,
Comptroller of State of Texas, 38 S.W.3d 741 (Tex.
App.-Austin[3rd Dist.] 2001, cert denied) |
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This
case again declared Texas' independently procured
premium tax unconstitutional. |
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State
Board of Insurance v. Todd Shipyards Corp., 370
U.S. 451 (1962) |
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Landmark U.S. Supreme Court
case limiting a state's ability to tax a foreign
domiciled insurer. |
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Additional Background on Captive
Planning (to come) |
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Client Mailings and Client
Memoranda RESTRICTED ACCESS |
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