The Internal Revenue Service’s (IRS) large business and international division (LB&I) has named micro captives an “area of significant compliance risk” that it is working on in 2019.
The IRS LB&I, which focuses on corporations and partnerships with assets greater than $10 million, outlined its strategic goals for 2019.
The division’s strategic goals include improved compliance activities, implementation of major programme priorities, workforce hiring and training, improved LB&I operations, and internal and external communication.
One of the LB&I division’s key programmes focuses on abusive tax shelters and transactions, a label that the IRS has repeatedly attributed micro captives with.
In the IRS’s 2019 Focus Guide, Douglas O’Donnell, LB&I commissioner, and Nikole Flax, LB&I deputy commissioner, commented: “We are working throughout LB&I, and closely with the small business/self-employed division, on several areas of significant compliance risk, including syndicated conservation easements and micro captive insurance.”
“These issues involve thousands of taxpayers and advisors, and require ongoing support of many of you as we look for the most effective means to bring taxpayers into compliance and seek to inform others to avoid non-compliant activity.”
