Tax InsuranceCAC Specialty’s Tax Insurance PracticeCAC Specialty’s Tax Insurance Practice comprised of seasoned tax attorneys and former tax insurance underwriters, combines deep tax technical expertise, industry experience, and business acumen to craft innovative and unique tax insurance solutions so any client can quickly transfer the risk of the unanticipated and detrimental consequences of a successful challenge by a taxing authority—creating more certainty for sponsors, corporations and stakeholders.Tax Insurance Brochure ›A Tax Practitioner’s Guide to Tax Insurance ›Clean Energy Tax Credits and Mitigating Investment Risk ›TEI Roundtable No. 41: Tax Insurance: An Agent of Change ›Energy Tax Credits – Mitigating Risk With Tax Insurance and Market Trends ›Q&A: Tax Liability Insurance Overview of Tax InsuranceTax insurance is a risk management tool protecting against tax loss arising from one or more transactions, investments, or events. It is designed to make the insured whole in the event of a successful challenge by a taxing authority and can cover loss for additional taxes, interest and penalties, claim expenses in defense of the covered tax position, and the amount by which the insured’s taxes are increased as a result of the receipt of insurance proceeds under the policy (i.e., “gross-up”). Tax insurance is akin to receiving a private letter ruling (“PLR”) from the taxing authority on the insured tax position. However, unlike a PLR, tax insurance can typically be purchased within 2 weeks—not months or years. We Are DifferentOur team consists of dedicated, experienced corporate tax attorneys (accounting firm, law firm, and Fortune 20 experience) and former tax insurance underwriters.Attorneys capable of handling technical tax issuesEquipped to guide the insurance market to understand difficult tax risksDevoted to client service and advising clients through every step of the underwriting process, including policy negotiationsReady to collaborate with the insurance market to craft insurance solutionsTax Insurance Market: Quick Facts15 markets with at least $50 million of capacity20 markets able to participate in any program$1.5 billion of total capacity on any U.S. tax programTax Insurance For M&A TransactionsTax insurance can be used to reduce or eliminate the risk of historic tax positions taken by the target entity, as well as tax issues arising from the transaction itself. Tax insurance removes the identified tax risk from a deal by transferring it to the insurer, providing certainty and flexibility.Not R&W InsuranceWhile known tax issues are excluded from coverage under a traditional representation and warranty (“R&W”) insurance policy, tax insurance complements a R&W insurance policy by providing coverage for such tax issues. Tax insurance can be used as a competitive tool by either the buyer or seller as part of the M&A process. It may be purchased by the buyer to make its bid more competitive or by the seller as part of its preparation for sale (thus, removing the tax issue from negotiations with bidders).BenefitsFacilitates deal negotiations by reducing or eliminating the need for tax indemnities and escrows for identified tax issuesFacilitates financing and investment decision-makingEnables a clean exit by eliminating a long-tail contingent exposureProvides purchase-price certainty by removing an identified tax exposureSecures future tax benefits to be realized from the transactionOffers liquidity and avoids the negative cash flow arising from a tax liabilityInsurable Tax RisksThere are three areas of insurable risks in M&A transactions where tax insurance can be utilized. First, tax insurance can be used to reduce or eliminate the tax risk related to historic tax positions taken by the target on the seller’s watch (e.g., debt v. equity treatment, deduction v. capitalization of expenses, or transfer pricing ). Second, tax insurance can be used to address tax issues arising from the transaction itself (e.g., any pre-closing restructuring, treatment of the transaction as a tax-free reorganization, or availability of a tax basis step-up). Third, tax insurance can be used to insure the historic tax treatment of the target entity itself (e.g., S corporation status, REIT status, or MLP status).Tax Insurance – Practice LeaderCAC Specialty’s Tax Insurance team prides itself on providing exceptional client service and crafting creative insurance solutions. JordanTamchinExecutive Vice President, Practice Leader, Tax InsuranceSpecialty Bio Page Send Get To Know Our Team SpecialtyMattMovafaghiSenior Vice President, Head of Tax Insurance Placements Bio Page Send SpecialtyBenGerberVice President, Tax Insurance Bio Page Send SpecialtyBrandonSantulliAssistant Vice President, Operations Manager, Tax Insurance Bio Page Send SpecialtyHamedKhashayarVice President, Tax Insurance Bio Page Send SpecialtyIsauraDel CarmenSenior Tax Analyst, Tax Insurance Bio Page Send SpecialtyJoshEmmettVice President, Tax Insurance Bio Page Send SpecialtyMichaelLevineAssistant Vice President, Operations Manager, Tax Insurance Bio Page Send SpecialtyLiamDuffyAssistant Vice President Bio Page Send SpecialtyMikeRecchiaVice President Bio Page Send Take the Next StepConnect with our CAC team today.