Lance Wallach Expert Witness
The I.R.S. is not alone in its campaign against small captives. At a Senate Finance Committee meeting in February, Charles E. Grassley, Republican of Iowa, asked Mark Mazur, the assistant secretary for tax policy at the Treasury Department, to look into ways to narrow the uses of captives.
There is a right way to set up these captives. But it takes longer and requires bringing in independent actuaries and accountants.
“You see people setting up structures using the same people all the time and they’re going through the routine,” Mr. Slenn said. “What captive managers like to do is turnkey and save on cost.”
But those shortcuts just might bring I.R.S. scrutiny.