Captivating Thinking

Bloomberg recently reported that Equifax Inc.’s insurance against cyber breaches is likely insufficient to cover the credit-reporting company’s costs tied to one of the biggest hacks in history.  This hack is particularly ironic as Equifax – the guardian of information used to cast financial judgment on consumers – has itself been unable to guard that information.  For that reason alone, the class action suit or suits are likely to be monumental.

According to Bloomberg, Equifax holds cyber-insurance policies that will

By Sean King, JD, CPA, MAcc

Principal, CIC Services, LLC

This is Part 2 of a series on the United States Tax Court’s recent Avrahami decision.

Introduction

Recently the United States Tax court issued the long-awaited opinion in the Avrahami captive insurance case.   And after more than 30 years of losing most every captive insurance case of consequence, the IRS finally got a win.

In Part 1 of this series we discussed the court’s decision that the Avrahami captive insurance arrangement failed

This is Part 1 of a series on the recent Avrahami decision.

By Sean King, JD, CPA, MAcc

Introduction

Last week the United States Tax court issued the long-awaited opinion in the Avrahami captive insurance case.  And after more than 30 years of losing most every captive insurance case of consequence, the IRS finally got a win.

The Avrahami case involved a small, foreign-domiciled captive insurance company (“CIC”) that had made both the 953(d) election (to be taxed as a US entity) and the 831(b) election (giving it favorable US tax treatment on its underwriting profits).   The CIC in question