IRS Section 831(b) — Advanced Tax Strategy
Legally Redirect Up to $2.85M Per Year Into Your Own Insurance Company
Reduce taxable income, build a protected asset base, and leverage a strategy most CPAs never mention — all within IRS guidelines.
$2.85M
Max Annual Premium
831(b)
IRS Tax Code Section
30+
Years of Legal Precedent
$2M+
Minimum Revenue to Qualify
What Is an 831(b) Captive?
Your Own Private Insurance Company — Built for Tax Efficiency
An 831(b) captive is a privately owned insurance company that allows eligible businesses to pay premiums for insuring their own risks. Under IRS Section 831(b), these premiums are tax-deductible for the business — and the captive pays taxes only on investment income, not premium income.
Most CPAs don't bring this up — not because it's complicated, but because it requires specialized knowledge outside standard tax planning. That's where Vast Solutions Group comes in.
How It Works — Step by Step
01
Your Business Pays Premiums
Tax-deductible premiums reduce your business's taxable income immediately.
02
Your Captive Receives the Premiums
Your privately owned captive collects up to $2.85M/year, taxed only on investment income.
03
Your Captive Receives the Premiums
Funds accumulate inside a compliant, licensed entity — shielded from business liabilities.
04
Claims Paid When Needed
The captive pays out for covered real business risks — just like any licensed insurer.
Key Benefits
Why Business Owners Choose the 831(b) Strategy
Significant Tax Reduction
Premium payments are fully deductible business expenses. The captive pays tax only on investment income — not on up to $2.85M in premiums.
Asset Protection
Assets inside the captive are shielded from business creditors, lawsuits, and general liability — building a protected financial reserve.
Long-Term Wealth Accumulation
Unused premiums compound inside the captive over time. Over 10–20 years, this builds substantial tax-advantaged reserves.
Covers Uninsured Business Risks
Insure gaps in coverage commercial carriers won't touch — key person, regulatory, supply chain, reputational, and cyber risks.
Estate Planning Advantages
Captive ownership can be structured to transfer wealth to heirs efficiently, creating powerful multi-generational planning opportunities.
IRS-Recognized Legal Strategy
When properly structured, 831(b) captives have 30+ years of legal precedent and IRS recognition as a legitimate business tax tool.
Eligibility
Is Your Business a Good Candidate?
Not every business is a fit. Here's what separates strong candidates from those
better served by other strategies.
Strong Candidates
Annual revenue of $2M or more
Consistent profitability with excess cash flow
Real, identifiable uninsured business risks
Industries: construction, healthcare, real estate, manufacturing, professional services
Willingness to maintain proper compliance and documentation
Long-term planning horizon of 5+ years
Likely Not a Fit
Revenue below $2M annually
Inconsistent or unpredictable profits
No clearly defined insurable risks
Looking for a one-year quick tax fix
Unwilling to maintain ongoing captive governance
Business in financial distress or early startup phase
The VastSolutionsGroup.com process
From Evaluation to Launch in 4 Steps
We handle the complexity. Most captives are operational within 90–120 days of
qualification approval.
01
Business Risk Assessment
We analyze your operations to identify real, insurable risks that qualify under IRS guidelines using our AI-powered audit tools.
02
Actuarial & Legal Structuring
Independent actuaries calculate premiums. Legal counsel manages domicile selection, licensing, and compliant entity formation.
03
Captive Activation
Your captive is licensed, capitalized, and begins accepting premiums — fully documented and compliant from day one.
04
Ongoing Management
We handle annual reporting, claims management, and IRS compliance — keeping your captive audit-ready year after year.
FAQs
Common Questions, Clear Answers
What is an 831(b) captive insurance company?
An 831(b) captive is a privately owned insurance company that lets eligible businesses pay premiums to insure their own risks. Under IRS Section 831(b), qualifying small captives are taxed only on investment income — not on premium income up to $2.85 million per year.
Is this strategy legal?
Yes — when properly structured. 831(b) captive insurance is a fully legal, IRS-recognized strategy with over 30 years of court precedent. The IRS scrutinizes abusive arrangements, which is why VastSolutionsGroup.com ensures every captive is built on real risks, arms-length premiums, and full compliance documentation.
How much can I redirect using an 831(b) captive?
Under current IRS rules, eligible small captive insurance companies can receive up to $2.85 million in annual premiums while being taxed only on investment income. The actual amount is determined by an independent actuarial assessment of your business's real insurable risks.
What risks can the captive insure?
The captive must insure real business risks — gaps in your existing commercial coverage. Common examples include key person risk, supply chain interruption, cyber liability, regulatory risk, and reputational harm. Fabricated or theoretical risks do not qualify and could trigger IRS scrutiny.
How long does it take to set up?
Most captives are operational within 90–120 days from the initial qualification review. This includes actuarial analysis, legal entity formation, domicile licensing, and initial capitalization.
What if the IRS audits my captive?
A well-structured, properly managed captive is built to be audit-ready. Vast Solutions Group provides full compliance documentation, independent actuarial reports, and annual governance records that meet the same standards required of any licensed insurance company.
Eligibility
Is Your Business a Good Candidate?
Complete the form and a VastSolutionsGroup.com specialist will personally review your situation and respond within one business day.
No commitment or obligation required
Reviewed personally by our advisory team
We only proceed where there is a genuine, compliant fit
Part of VastSolutionsGroup.com's integrated tax strategy approach
Led by R. Kenner French — #1 Amazon bestselling author & tax strategistst
Qualification Request
Tell us about your business and we'll assess your captive insurance eligibility.
Is Your Business Leaving Up to $2.85M in Tax Savings on the Table? Let's Find Out.
Headquarters
755 Winslow Way East, Suite 101, Bainbridge Island WA 98110
Call
(415) 212-8189
Site
www.VastSolutionsGroup.com