IRS: Step Up Scrutiny of Captive Foreign Insurance Subsidiaries

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IRS tells its examiners to more closely scrutinize captive foreign insurance subsidiaries during excise tax audits of foreign insurance companies. The new memorandum (SBSE-04-0811-070) is the latest development in a continued crackdown on the use of these subsidiaries to avoid taxes. In the document, IRS tells agents to check whether captive subsidiaries have engaged in closing agreements with the service and whether there is additional information relating to controlled industry cases.