The economic family doctrine was the IRS’ primary legal argument against captive insurance. This theory was developed over a series of internal memorandums which I’ll discuss in a later post. But to understand the economy family doctrine — and the primary arguments against it — there are two legal concepts we need to explain.
The legally separate nature of corporations.
While it seems common sense that a court would treat each corporation as a separate legal entity, this is a concept that had to be established in case law in Moline Properties. The following is from my book:
In Moline, Uly Thompson organized Moline Properties as a Florida Corporation. Thompson Read more