IRS Permitted to Keep Micro-Captive Material Adviser Documents

The IRS may keep documents and information it wasn’t entitled to collect from taxpayers and material advisors on micro-captive transactions, the U.S. District Court for the Eastern District of Tennessee ruled.

The Thursday decision granted a motion from the tax enforcement agency for reconsideration of a March 21 ruling that the agency had to return all documents and information collected under a notice that was deemed invalid. The court concluded it would only be appropriate to order a return of any collected documents for the party involved in the case, Tennessee firm CIC Services LLC.

“At bottom, CIC ...