Captives Cheer Tax Ruling
A reversal of a 1999 ruling that said the United Parcel Service illegally used offshore insurers as tax shelters came as a pleasant surprise to a captive insurer group, which is wondering whether this will be the last word on the controversy.
A three-judge panel of the 11th U.S. Circuit Court of Appeals sent the case back to the U.S. Tax Court. The appeals court said the Internal Revenue Service should analyze any claims against UPS under tax code provisions cited by the shipping company.
"The industry was very surprised at the Court of Appeals decision in the UPS case," said Captive Insurance Companies Association President Carl Modecki, principal of Carl A. Modecki Consulting Services in Tallahassee, Fla. "I guess the issue now is whether the IRS will try to appeal it or whether theyll let it go."
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