Proposed Regulations on Micro-Captive Listed Transactions and Micro-Captive Transactions of Interest

Summary

This practice note discusses proposed regulations issued by the Internal Revenue Service (IRS) and the U.S. Department of the Treasury (Treasury Department) under I.R.C. Section 6011 that identify transactions that are the same as, or substantially similar to, certain micro-captive transactions as listed transactions, a type of reportable transaction, and certain other micro-captive transactions as transactions of interest, another type of reportable transaction. The IRS and the Treasury Department believe that there are cases in which the use of these micro-captive transactions to claim the tax benefits of treating a contract as an insurance contract is for the purpose of tax avoidance or evasion.