In a June 2018 interview with the captive insurance industry publication Captive International, Frazer Ryan tax partner Brandon Keim predicted disappointing outcomes for the industry in three pending U.S. Tax Court cases.

The three cases — Caylor v. Commissioner, Wilson v. Commissioner, and Syzygy Insurance v. Commissioner — will be decided in the wake of two unfavorable decisions for captive insurance companies: Avrahami v. Commissioner and Reserve Mechanical v. Commissioner.

However, industry prospects are brighter in the long run, predicted Brandon, who tried the Avrahami and Wilson cases during his tenure as a senior trial attorney at the IRS.

“Eventually the doom and gloom will end with taxpayers proving that section 831(b) was not merely passed by Congress to add more pages to the 74,608-page-long Tax Code,” Brandon was quoted as saying, “but that there are businesses legitimately concerned about risk and seeking solutions to manage that risk.

“The IRS’s arguments, especially as they relate to risk pools, will become more difficult to make as the risk pools in the industry begin to look more like the traditional insurance market.”

Read the full article: Caylor, Wilson and Syzygy cases spell doom and gloom, says tax specialist