Kyle D. Logue (Michigan) presents The New Market in Tax Insurance: Insuring Legal Uncertainty or Enabling Tax Avoidance? today at UCLA as part of its Tax Policy and Public Finance Workshop series.  Here is the abstract:

In one sense, this is an article about legal uncertainty and the role that private and public insurance can play in managing it. Somewhat more narrowly, it is an article is about tax law enforcement and the familiar if ill-defined distinctions between tax evasion, tax avoidance, and “abusive” tax avoidance. Most narrowly, the article is about a new type of insurance policy, called tax indemnity insurance (or transactional tax risk insurance), which provides coverage against the risk that the IRS will disallow a taxpayer-insured’s tax treatment of a particular transaction. The question is whether this type of insurance coverage increases incentives for illegitimate tax avoidance or, alternatively, provides needed certainty to taxpayers. Should tax insurance be banned? Encouraged? Ignored? And what about insurance against other types of regulatory uncertainty? To what extent should the government, instead of commercial insurance companies, provide such legal-uncertainty insurance directly? On the narrow question of tax indemnity insurance, the article concludes that the appropriate regulatory response is probably (a) to allow the policies to be sold but (b) to compel disclosure to the IRS by taxpayers who purchase such policies.

The workshop is from 3:00 – 5:00 pm PST in Room 2448 at UCLA.