Amy Lewis, of Captive Resources, LLC, discusses, in spite of continued close scrutiny from the IRS, the continued viability of legitimate micro-captives, and the considerations to ensure the structure succeeds.
Excerpt: Ongoing scrutiny by the Internal Revenue Service (IRS) around 831(b) micro-captive insurance companies and the potential misuse of these captives has caused some companies to step back for an analysis over whether a micro captive insurance company is the right fit for their risk management needs.
Given the recent activity around the potential abuse of these captives, now is a good time to review how to develop a strong foundation for success when forming or managing a micro-captive. A micro-captive that has been structured correctly can be an effective tool for successfully managing a company’s risk profile and supporting a business’s risk management needs.
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