⚖ Oral Arguments, with Context

The Seventh Circuit hears a tax dispute involving the Presta family's grocery businesses and an insurance company they owned. The businesses paid premiums to that company, CFM, for coverage of business risks and deducted those payments on their tax returns. The arrangement was designed to use tax benefits available to small insurance companies. But the IRS said it did not qualify as insurance for federal tax purposes. The Tax Court agreed, pointing to problems with how policies were issued and claims were handled, even though the company was licensed in Utah. That left the businesses without their deductions, while CFM still had to count the payments it received as taxable income. The taxpayers' lawyer will argue that the court used the wrong test for insurance and failed to give proper weight to Utah's approval. She will also argue that rejecting the insurance treatment should not leave both sides of the transaction taxed this way. The government will defend the distinction between a state insurance license and federal tax treatment, and argue that the businesses and CFM are separate taxpayers. Listen for two questions: whether this arrangement counts as insurance, and what follows for the money if it does not.

Robertino Presta v. CIR (No. 26-1067) — U.S. Court of Appeals for the Seventh Circuit, argued November 6, 2026.