Tile Importer Fights $2 Million Tax Bill From IRS Over Insurance

A tax bill of more than $2 million is being challenged by a New York City-based importer of glass tiles, mosaics, ceramics and other decorative construction materials.

The IRS is wrongly classifying Deutsch Imports LLC’s insurance arrangement, the importer told the US Tax Court.

It petitioned the Tax Court claiming it acted in good faith and disputing the IRS’ contention that its microcaptive insurance arrangement wasn’t legitimate for tax purposes. In total the IRS asserted $1.79 million in tax deficiencies plus $358,000 in tax penalties for 2018, 2019, and 2020, after it determined that the $4.83 million that Deutsch paid ...