Description: The interaction of section 7702 cash value accumulation test [CVAT] and state nonforfeiture laws [SNFL] create a dual limitation on traditional life insurance contratcs. CVAT limiting the maximum permissible cash value and SNFL requiring a minimum cash surrender value. This article examines these dual limitations.

Description: Updated discussion of IRS Proposed Regulations under Section 162(m)(6), their potential impact upon the life insurance industry, and a 2 percent de minimis exception.

Description: The American Council of Life Insurers provides an update on recent tax-related ACLI activity. Topics in this issue include (1) the NAIC's Principle-Based Reserves (PBR) Review Working Group and its exposed revisions to the Annual Statement Blanks; (2) ongoing communications with the Internal Revenue Service and Treasury to seek published guidance on PBR; (3) an update on tax reform activity in Congress; (4) the framework for change issued by the NAIC's Variable Annuities Issues (E) Working Group; and (5) the ERISA Advisory Council's development of model notices and disclosures for pension risk transfers.

Description: This article discusses the temporary waiver and how it provides only limited relief from the section 401a9 minimum distribution requirements.

Description: This article discusses tax rates used in computing toll charges for closing agreements with respect to corrections under IRS section 7702.

Description: A discussion of the Open Transaction Doctrine and how it was applied to prevent current inclusion of taxable gains resulting from the sale of stock acquired in a demutualization.

Description: The author discusses some common myths about Congress’ tax policy under the 1984 Act that he would like “to debunk.”

Description: This article provides a short history of the correction procedures previously developed to address compliance failures and the shortcomings of those procedures under sections 101f and 7702, laying the foundation for a sea change in the correction process.

Description: This article discusses the implications of a principle-based reserve PBR system with respect to federal income taxation of life insurance companies, particularly with respect to tax reserves and their deductibility for tax purposes. The article discusses potential problems with existing tax rules for reserve deduction, what courses of action the IRS could take, and suggestions for design features of a PBR approach that would make it more consistent with current tax rules. Life insurance product tax implications are also discussed.

Description: How including the intent and rationale of the tax law in system specifications can lead to better software system designs.