When you file your 2020 tax returns, will you be meeting your obligations for yet another year? Or, will you be exposing yourself to the risk of an Internal Revenue Service (IRS) audit or investigation? Oversights and other mistakes can lead to IRS scrutiny—especially when these mistakes involve the IRS’s current enforcement priorities.

In March of 2020, the Internal Revenue Service (IRS) began sending warning letters to micro-captive insurance companies and their clients. This initiative was based on information the IRS received from various sources indicating that some micro-captive insurance companies were engaging in abusive practices—with attendant tax fraud implications.