Our Platform / Tax Risk
An Opinion Offers Comfort. We Offer Certainty.
Tax insurance that converts the contingent exposure in a tax position into financial certainty — reinforcing the opinion your advisors gave, and removing the risk that a future challenge unwinds it.
Tax Insurance
A well-reasoned tax opinion tells you a position should hold. It doesn't guarantee the outcome.
For complex positions, companies and individuals rely on an opinion letter from their tax advisor. Those opinions offer comfort — but not certainty. Our tax solutions reinforce the professional opinion already obtained and remove the financial uncertainty entirely, insuring the contingent exposure subject to future challenge by the IRS or state and foreign authorities. Used alone or alongside a private letter ruling request, they turn a reasoned "should" into a covered outcome.
Coverage reimburses the insured for the tax itself, plus related fines, penalties, interest, denied benefits, and the legal and accounting cost of the dispute — generally on an after-tax, grossed-up basis, backed by highly rated carriers.
Who Leads the Practice
Led by a former IRS Director of Penalties & Interest.
Our Tax Risk Consulting practice is run by someone who spent a career on the other side of the table — and it's supported by a team drawn from Merrill Lynch, ABN Amro, Deloitte, Bank of America, and AIG, with tax counsel from the country's most prestigious firms. We know how the Service thinks about penalties, because we've administered them.
How We Work
Three engagements, timed to when you need us.
Tax Risk Audits
An ounce of prevention. We inspect current practices, procedures, and systems — and review past, current, and anticipated transactions — to find where you're exposed to a penalty assessment, then recommend changes that mitigate it. In many cases, an improved practice leads the IRS not to impose a penalty for past behavior at all.
Tax Risk Compliance
We conduct an in-depth review of the facts, build a plan to ensure compliance, and challenge or reduce pending penalties. We also analyze your IRS account transcripts to determine whether previously paid penalties and interest can be challenged and recovered.
Tax Risk Mitigation
For past, present, or future liabilities, we structure tax insurance that transfers contingent exposure to a rated carrier — an alternative to reserves, an alternative or complement to a private letter ruling, and a way to lock in the economics a transaction was built to deliver.
Penalties and interest represent 67% of the balance owed across the IRS's collection inventory.
In a single fiscal year the IRS proposed over $20 billion in penalties and interest — $7.1 billion of it against businesses. For most organizations, penalties are not a rounding error. They are a material, recurring, and often avoidable drain on operating capital.
Sample Opportunities
Where tax insurance earns its place.
For corporations
Locking in the benefits of a completed or contemplated transaction; replacing or reducing tax reserves; protecting net operating loss carry-forwards through an ownership change; safeguarding a prior tax-free spin-off; addressing debt-vs-equity, lease-vs-sale, or S-corp and REIT qualification risk.
For individuals and families
Protecting against liability arising from estate-planning and wealth-management techniques — giving families the same certainty on sophisticated structures that corporations secure on their transactions.
Proof
Certainty, where the ruling wasn't available.
The spin-off the IRS wouldn't rule on
When the Service declined to rule on whether a conglomerate's spin-off qualified as tax-free under §355, we structured coverage for the business-purpose risk — letting the transaction proceed without the ruling it couldn't get.
§355
The reorganization at risk
When executive compensation in a merger threatened to be re-characterized as consideration — potentially breaking the continuity-of-interest test and the deal's tax-free status — our policy insured the shareholders against exactly that outcome.
§368(a)(1)(A)
If a tax position is the last uncertainty in your transaction, we can remove it.
Bring us the opinion. We'll tell you whether it can be insured.