IRS IS AFTER CAPTIVE INSURANCE AND CONSERVATION EASEMENTS

The IRS has put out yet another news release, IR-2020-226, to warn taxpayers who have engaged in abusive risk-pooled 831(b) captive insurance transactions (a/k/a "microcaptives") to consult with independent tax counsel before making any tax filings regarding the transaction. The IRS is also warns that its previous settlement terms offered to taxpayers are probably not going to be available to them in the future, and that any settlement with the IRS "will require additional concessions by the taxpayer." What additional concessions? The IRS then explains: For those taxpayers that do not exit the transaction and continue taking such deductions, the IRS will disallow tax benefits from transactions that are determined to be abusive and may also require domestic captives to include premium payments in income and assert a withholding liability for foreign captives. The IRS will also assert penalties, as appropriate, including the strict liability penalty that applies to transactions that lack economic substance. EASEMENT AUDITS A class-action claiming that the promoters of syndicated conservation easements knew from the outset that their deals violated tax laws is a new legal avenue for aggrieved investors as the Internal Revenue Service and the Justice Department grind through their own crackdowns. Lance Wallach receives hundreds of calls annually from people who are trying to get out of these scams. Google Lance Wallach and your advisor. Who do you trust? 516-236-8440 Wallachinc@gmail.com