Tax Judge Upholds Microcaptive Penalties Under Economic Substance Doctrine

( November 14, 2025, 1:43 PM EST) -- WASHINGTON, D.C. — Holding that the economic substance doctrine requires a threshold relevancy determination, a U.S. Tax Court judge found the doctrine applicable to accuracy-related penalties arising from purported microcaptive insurance arrangements that were determined to lack genuine risk transfer or substantive business purpose, ruling that the resulting underpayments of tax were subject to nondisclosure penalties....

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