Captivating Thinking

Last week, we noted that the Internal Revenue Service suffered another defeat on January 14, 2014 as the U.S. Tax Court handed down its ruling which upheld that payments by Rent-A-Center to its Bermuda-domiciled captive insurance company, Legacy Insurance Co. Ltd., were deductible as an insurance expense.

This ruling is particularly informative to captive owners and captive managers as Rent-A-Center and its captive insurance company, Legacy, employed some practices that many in the industry have traditionally regarded as “aggressive.”  In losing this case, the I.R.S. (The Service) “lost some ground” in a manner of speaking. 

We’ve seen this movie before.

Tax Man, The IRS Loses Its Challenge Against A Captive.

Tax Man 2 – The Sequel – The IRS Loses Again In A Captive Challenge.

Tax Man 3, The IRS Strikes Back… And Loses Again.

Tax Man 4, This Time It’s For Keeps But The Captive Owner Wins Yet Again.

You have probably heard the story about legendary New York Yankees slugger, Babe Ruth, pointing to the center field wall.  It was the fifth inning of Game 3 of the 1932 World Series at Wrigley Field in Chicago.  As it was late in his career, the Home Run King had lost some of his punch.  In his usual form, he was down in the count with two strikes.  At this point, he stepped back and pointed his bat at the center field wall.    After calling his shot, Ruth put the next pitch high over the center field wall for a home run.

Governor Bill Haslam of Tennessee called his shot and hit a home run of his own in 2013. 

#1 Improve my risk management plan for my business

#2 Take action to reduce my tax burden

#3 Start putting away more wealth for the future

#4 Make sure all my assets are protected from lawsuits and creditors

LIGHT BULB!                                                                                                                                                   

Accomplish all four resolutions in 2014 in one bold move by owning my own insurance company!

Happy New Year!!!  from all of us at CIC Services, LLC