Article ID: 1c9dad819d0b05a73a9aad21704af4614275631aa58e63b9579b8ea8b8267c45
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831(b) captives remain under IRS scrutiny - Business Insurance Skip to content Register for free Search Search Log In Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers Risk Management Cyber Risks Pricing Trends Mergers & Acquisitions Technology Sponsored Content WSIA RISKWORLD Workers Comp & Safety Workers Comp Cost Control Pain Management Workplace Safety International EMEA Asia-Pacific Latin America People Events BI Intelligence Top 100 Agents & Brokers Best Places to Work 2025 Lists Directories Insurance Pricing BI Stock Index Magazine Current Issue Past Issues Subscribe Women to Watch ALL INsurance Resources Risk Perspectives Sponsored Content Webinars White Papers 831(b) captives remain under IRS scrutiny by Gavin Souter Alternative Risk Transfer/Captives Aug 13, 2026 BURLINGTON, Vermont – Captives electing Section 831(b) tax treatment remain under heightened IRS scrutiny despite a federal court ruling that struck down part of the regulations targeting certain arrangements, tax experts said. IRS regulations issued in 2025 require certain 831(b) arrangements that meet specified loss-ratio or financing-transaction tests to be reported to the agency, said Bailey Roese, a Columbus, Ohio-based partner at Dentons Bingham Greenebaum, during a session Wednesday at the Vermont Captive Insurance Association’s annual conference. Under the regulations, some arrangements were classified as “listed transactions,” which subjected them to particularly stringent reporting requirements and the risk of significant penalties, while others were classified as “transactions of interest.” Federal courts have since considered challenges to the regulations, with a Texas federal court striking down the listed-transaction category while leaving the transaction-of-interest provisions intact. Appeals remain pending, Ms. Roese said. “I think it is really good that the court said the IRS overstepped here,” she said. “We need to actually look at all of the facts and circumstances for these captives. We can’t just make a blanket judgment of every single one that has elected Section 831(b) taxation.” The decision is being appealed and does not mean captive owners should expect IRS scrutiny to subside, panelists said. The IRS has also made it easier for captive owners to revoke an 831(b) election without obtaining a private letter ruling, said Jean Baxley, managing director, Washington national tax, at Deloitte Tax. The change came at the same time as the new regulations and could be seen as offering captive owners an opportunity to leave the 831(b) regime amid increased IRS enforcement pressure, she said. “If you are an 831(b), you are in some kind of a pool of possible audit,” Ms. Baxley said. 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