• A Tax Court Opinion in Avrahami—Finally
  • September 26, 2017 | Authors: P. Bruce Wright; Saren Goldner; M. Kristan Rizzolo
  • Law Firms: Eversheds Sutherland (US) LLP - Washington Office; Eversheds Sutherland (US) LLP - New York Office
  • Captive Insurance Company Reports

    On August 21, 2017, the US Tax Court issued its long-awaited opinion in the companion cases of Avrahami v. Commissioner and Feedback Ins. Co., Ltd. v. Commissioner, 149 T.C. No. 7 (2017), holding against the taxpayers in the first Section 831(b) microcaptive case to be decided. Although it was rumored that the case was to be a reviewed Tax Court opinion, it was not, and the opinion seems carefully designed not to draw any new lines with respect to the definition of insurance.

    In their article for Captive Insurance Company Reports, Eversheds Sutherland attorneys P. Bruce Wright, Saren Goldner and M. Kristan Rizzolo discuss that the opinion instead focuses on the many taxpayer unfavorable facts present in the case and concludes that the arrangements in question were not insurance for federal tax purposes.