The 831(b) Institute has called on the Internal Revenue Service (IRS) to extend the deadline for new reporting regulations under Section 831(b) of the Internal Revenue Code.
In a letter sent to acting IRS commissioner Melanie Krause on 7 April, the organisation joined state captive insurance associations across the US in urging the agency to reconsider the timeline.
The rules, introduced in January under regulations 26 CFR 1.6011-10 and 1.6011-11, require certain micro-captive insurance owners to file disclosures with the Office of Tax Shelter Analysts by 14 April.
Captive owners are subject to these disclosures if they report loss ratios below a certain threshold or have taken part in specific financial transactions within the past 10 years.
Dustin Carlson, president of the 831(b) Institute, says: “These regulations provide only 90 days for affected micro-captive industry members to review their financial statements and determine if the disclosures apply to their operations.
“Due to their size, small businesses are not afforded the same resources to provide the capital or manpower needed to adequately respond to these time-sensitive demands, especially when overlapping with the already-busy April 15 tax filing deadline.”
The institute is requesting a 90-day extension, which it says would give micro-captive owners and small businesses more time to properly research and comply with the new requirements.
