Ax v. Comm'r
United States Tax Court
P-H's LLC faced various risks. P-H formed SMS as a "captive insurance company", and in 2009 and 2010 LLC paid SMS premiums for coverage of the risks by SMS. LLC deducted the premiums, and the deductions were passed through to Ps' tax returns.
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P-H's LLC faced various risks. P-H formed SMS as a "captive insurance company", and in 2009 and 2010 LLC paid SMS premiums for coverage of the risks by SMS. LLC deducted the premiums, and the deductions were passed through to Ps' tax returns. After audit, the IRS disallowed the deductions and stated in the notice of deficiency (NOD): "You did not establish that the amount shown was (a) insurance expense, and (b) paid". Ps filed a petition in the Tax Court disputing the NOD, and R filed an answer that did not make any affirmative allegations as to the disallowed insurance expense deductions.…
1Opinion of the Court
PETER L. AX AND BEVERLY B. AX, Petitioners v. COMMISSIONER OF INTERNAL REVENUE, Respondent
Ax v. Comm'r
Docket No. 29078-14.
United States Tax Court
146 T.C. 153; 2016 U.S. Tax Ct. LEXIS 11; 146 T.C. No. 10;
April 11, 2016, Filed
An appropriate order will be issued.
P-H's LLC faced various risks. P-H formed SMS as a "captive insurance company", and in 2009 and 2010 LLC paid SMS premiums for coverage of the risks by SMS. LLC deducted the premiums, and the deductions were passed through to Ps' tax returns. After audit, the IRS disallowed the deductions and stated in the notice of deficiency (NOD):…
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