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    Disclosure Deadlines Extended for Participants in and Material Advisors to Micro-Captive Transactions

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    On December 29, 2016, the Internal Revenue Service issued Notice 2017-08, extending the disclosure deadlines for participants in and material advisors to certain micro-captive transactions.

    Prior guidance from the Service, issued in Notice 2016-66, had identified certain micro-captive transactions as “transactions of interest” and indicated that the general disclosure requirements that typically apply to transactions of interest would apply (see our November 10, 2016 blog entry available here and our November 15, 2016 QuickStudy available here, both entitled “Captive Insurance Arrangements Taking Advantage of Section 831(b) Election May Be Required to Report to the IRS”). Because Notice 2016-66 potentially applied to transactions occurring as far back as November 2, 2006, the notice originally provided that participant disclosure statements for prior-period transactions filed by January 30, 2017 would be timely filed. Following numerous requests for an extension of this time period, the IRS in Notice 2017-08 extended this deadline, along with the January 31, 2017 deadline applicable to certain disclosure statements required to be filed by material advisors, to May 1, 2017. This is welcome news, as both a participant’s failure to disclose and a material advisor’s failure to disclose could result in significant penalties.

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