Firm Fights $21 Million in Promoter Penalties Over Microcaptives

The IRS wrongly assessed more than $21 million in tax penalties tied to its work advising businesses and helping to form microcaptive insurance arrangements, a global tax consulting firm told a Texas federal court.

Ryan LLC told the US District Court for the Eastern District of Texas Wednesday that it didn’t make false or fraudulent statements about tax benefits tied to small captive insurance companies from 2013 to 2018, and therefore the government can’t establish the elements required for liability under IRC Section 6700.

IRC 6700 is intended to target promoters of abusive tax shelters who knowingly make false ...