Tax Liability Insurance is a valuable tool for managing tax risks. It provides companies with financial protection for uncertain tax liabilities (related to historical tax positions — or uncertain positions arising as a result of a merger or acquisition) against a future challenge by a tax authority by transferring risk to an insurance provider.
Our tax liability team possesses the expertise to develop tax liability insurance policies with coverages for estimated tax as well as any interest, penalties and defense costs. We are also able to offer coverage for a ‘gross-up’ for the income taxes arising from insurance proceeds received under a policy.
Tax Credit Recapture
Our tax credit recapture policy can backstop or replace a sponsor’s tax indemnity to a tax equity investor by providing protection where an investment may be outside the core business of the tax equity investor or an asset-backed securitization is sought. We consider contingent exposures related to a tax authority regarding the investment structure, the qualified basis for expenses incurred and recapture of the tax credits.
Tax Opinion / Liability
We consider contingent exposures related to the tax treatment of tax return positions taken in the ordinary course of business or specific tax issues in connection with broader merger or acquisition transactions (historical or contemplated).