Notice 2017-08 Transaction of Interest – Section 831(b) Micro-Captive Transactions

On December 29, 2016, the Internal Revenue Service (IRS) released Notice 2017-08, which extends the deadline for filing Form 8886 and Form 8918 in connection with “micro-captive transactions” to May 1, 2017. CLICK HERE for a copy of Notice 2017-08.

RMC previously provided a memorandum regarding Notice 2016-66, in which the Department of the Treasury and the IRS identified certain “micro-captive transactions” as a “transaction of interest”. CLICK HERE for a copy of our Technical Memorandum on Notice 2016-66.

A taxpayer participating in a transaction of interest is required to attach a Form 8886 to its tax returns. This includes the captive, the insured business and the owners of the captive and the insured business.  In addition, the Form 8886 must be filed with the IRS Office of Tax Shelter Analysis (OTSA).  A person who is a “material advisor” is required to file Form 8918 with OTSA.  Notice 2016-66 required taxpayers participating in a “micro-captive transaction” to file the Form 8886 with OTSA by January 30, 2017.  In addition, Notice 2016-66 required material advisors to file Form 8918 with OTSA by January 30, 2017.  Notice 2017-08 extends this date to May 1, 2017.

If you believe you have participated in a transaction the same as or similar to the one identified in Notice 2016-66, you should consult your independent legal and tax advisors to determine whether you are required to file Form 8886 or Form 8918.

If you have any questions, contact RMC’s headquarters at 888.599.5553 or your regional representative.