Tax Court Ruling Gives Boost To Captive Insurers

Law360, New York (January 21, 2014, 4:44 PM EST) -- The U.S. Tax Court last week expanded its view on captive insurers by allowing Rent-A-Center Inc. to deduct payments made to its Bermuda-based insurance subsidiary, but experts say a problem with the deal's structure could be the Internal Revenue Service's ticket to a viable appeal.

In a split decision, the Tax Court found that the deductions were permitted because RAC's insurance unit Legacy shifted risk from the company's numerous subsidiaries, the latest in a series of favorable decisions for captive insurers in the last several years....
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