The IRS is offering a settlement to taxpayers under audit who participated in abusive “micro-captive” insurance transactions. In these deals, promoters and others persuade owners of closely held entities to participate in schemes that lack many of the attributes of genuine insurance. The IRS has long disallowed the related tax benefits claimed by taxpayers. The settlement requires substantial concession of the income tax benefits along with appropriate penalties (unless a taxpayer can demonstrate good faith, reasonable reliance). Eligible taxpayers are receiving the settlement offer in an IRS letter. If they don’t participate, the IRS says it will continue audits under normal procedures.  Visit our website for more information!