SRA 831(b) Admin is a leading captive insurance administrator, primarily operating in the small to mid-sized market. The company manages captive insurance policies with under $2.8 million in annual premiums, known as microcaptive insurance or 831(b) Plans.

Generally, captive insurance involves a parent company forming an insurance company to insure itself against a particular risk.

Under section 831(b) of the Internal Revenue Code, small insurance companies with less than $2.8 million dollars in annual premiums may elect to pay federal income taxes only on investment returns.

Due to alleged concerns about mismanagement and abuse, especially of the 831(b) election for tax purposes, the Internal Revenue Service began an aggressive audit campaign against microcaptives in the 2010s. This included listing microcaptive insurance arrangements on the agency’s “Dirty Dozen” list of tax scams.

As the threat to its operations posed by the IRS continued to grow, SRA 831(b) Admin came to LS2group in early 2023 to formulate a multifaceted strategy for promoting reform.

The company’s primary goal was to advocate for decreased IRS regulatory and enforcement pressure and improved guidelines from the agency regarding how to properly formulate a microcaptive. However, given the IRS’ apparent intransigence on the issue, SRA also engaged a lobbying firm to push the issue on Capitol Hill.

As a result, LS2group worked closely with SRA to develop a list of congressional targets as the focus of the issue advocacy campaign and in support of the lobbying effort. Strategic messaging was developed, and LS2group began running a new nonprofit known as the 831(b) Institute. Several prominent individuals within the microcaptive industry were also secured to act as advisors and spokespeople for the Institute.

LS2group then began a campaign that included publishing opinion pieces in relevant media markets, as well as securing letters and emails to targeted members of Congress. The campaign’s goal was to reach key members of Congress, especially on the House Ways and Means Committee, and influence them to speak out against IRS overreach and abuse toward microcaptive owners.

LS2group successfully placed an op-ed in The Oklahoman on the same day as a key House Ways and Means Committee field hearing in Oklahoma, shortly after starting the campaign. Since then, the team has secured op-ed placements in both mainstream and industry outlets, including Bloomberg Tax, the Arizona Capitol Times, the Phoenix Business Journal, the Des Moines Register, Captive Insurance Times, InsuranceNewsNet, and more.

The team has also secured radio interviews in Iowa and Missouri, emails to key members of Congress, and interviews for Institute advisors in industry publications to discuss the issue in detail.

The lobbying team in Washington, D.C., has also utilized this material, bringing it to the direct attention of members of Congress and their staff.

To date, several members of the House Ways and Means Committee have signed on to a joint letter to the IRS. The letter calls on the agency to work with the microcaptive industry to develop a commonsense regulatory framework for small businesses to operate within.