IRS continues war on 831(b) captives: When will it end?

• Only a small number of cases brought against 831(b) owners have concluded
• ‘Listed transaction’ fears and IRS pressure leading to “panic closures”
• No timeline for IRS to confirm status of latest proposals
• Legislative proposals being prepared for IRS

The Internal Revenue Service (IRS) remains at a stand-off with captives making the 831(b) tax election, and there is no indication of an imminent conclusion, with some observers believing the IRS is purposely drawing out the process.

Captive Intelligence reported in April 2023 that the IRS had proposed new regulations for ‘micro captives’, which divided opinion across America’s captive landscape, with some saying they could destroy the industry, while others have branded it a “refreshing change”.