Tax Court Rejects Deductibility of Partnership’s Tax Insurance Premiums

Tax result insurance, once a novel concept, is now commonplace.  Many parties get it in connection with transactions to reduce uncertainty, make investments more appealing, provide cost-effective risk mitigation, etc.  Some issues regarding the tax treatment of insurance are clear, while others are evolving.  The latter category includes whether partnerships can claim deductions for paying premiums.  This article by Partner Hale Sheppard describes two main types of insurance, earlier administrative guidance about deductibility, criticism of such guidance, and a new Tax Court ruling in 2026.

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