Next in the Captive Cases Series will be the Humana Cases.  The captive cases can be broken down into two segments: the economic family cases — where the IRS gained trial momentum for their theories, and the Humana cases, where taxpayers began scoring victories. As such, this is an appropriate place to stop and sum up the overall captive legal situation before moving onto Humana.

Here are the salient points moving forward.

1.) Business necessity drove the formation of early captives. In all economic family cases, some defining business need drove the formation of the captive. For example, the taxpayer in Ocean Drilling was engaged in a business which was new (offshore oil Read More