Christopher Rizek Weighs in on Microcaptive Cases for Litigation in Tax Notes

The IRS’s concession of the rest of the tax liability not conceded by the taxpayers left the court with nothing to do despite petitioners’ wish for an opinion on the matter, according to the Tax Court.

Christopher S. Rizek of Caplin & Drysdale told Tax Notes that the IRS’s concession of the vast bulk of its asserted deficiency in the microcaptive insurance case Puglisi v. Commissioner is the first taxpayer victory on the issue he has heard of since the agency started focusing on it in the last five or six years. Rizek is one of the petitioners’ attorneys.

. . .

Rizek said the IRS’s concession of the vast bulk of its asserted deficiency in the microcaptive insurance case Puglisi is the first taxpayer victory on the issue he has heard of since the agency started focusing on it in the last five or six years.

The petitioners weren’t worried about section 7430 fee awards because they wouldn’t have qualified, but they wanted to present their strong case for determination by the Tax Court to stand against the string of IRS wins — from Avrahami v. Commissioner, 149 T.C. 144 (2017), through Syzygy Insurance Co. Inc. v. Commissioner, T.C. Memo. 2019-34.

“We wanted an opinion,” Rizek said. “But the net outcome is very taxpayer favorable.”

For the full article, please visit Tax Notes’ website (subscription required).