Description: Discusses the meaning of statutory reserves with respect to a pending IRS ruling, in the case where different levels of statutory reserves are required in different states.

Description: This dialogue discusses the history and purpose of section 811(a) and its historic role in the computation of life insurance company taxable income and, in particular, reserves.

Description: Section 807d of the IRC provides that the deductible reserve for a life insurance contract is the greater of net surrender value or the Federally Prescribed Reserve FPR calculated under prescribed interest rate and mortality assumptions, but in no event can the tax reserve exceed “aggregate statutory reserves” i.e., the statutory cap. This article logically concludes that deficiency reserves are included in the calculation of the statutory cap.

Description: Discussions on: 1. tax deductability of surrender losses of life insurance contracts 2. the IRS questioning of the immediate drop in asset values for variable product valuations 3. the analysis of risk distribution in the context of reinsurance and 4. Life Company Net Operating Loss NOL Carryback.

Description: Actuary/accountant/tax attorney dialogue on recent guidance issued regarding treatment of deficiency reserves with respect to the “statutory reserves cap” of Internal Revenue Code section 807(d)(1).

Description: The Internal Revenue Code includes certain rules that apply when a taxpayer has a change in method of accounting. A special rule applies when a life insurance company changes its basis of computing reserves. The article discusses two recent court cases, Bosamia v. Commissioner and Capital One Financial Corp. v. Commissioner, that address change-in-method-of-accounting issues. The article examines whether and how the courts' conclusions in these two cases might apply to changes in basis of computing reserves to correct errors.

Description: A discussion of, first, the three-year transition period for adopting principle-based reserves and how it might not apply to tax reserves, and second, the tax impact of adding investment options to in-force contracts.

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

Description: Two relatively recent developments have heightened tax managers’ anxiety concerning the possible disclosure of tax accrual workpapers.

Description: The recent Tax Technical Corrections Act of 2007, Pub. L. 110-172, signed into law on Dec. 29, 2007, includes a provision that permits a taxpayer to select positions in a straddle and thereby avoid surprise applications of the straddle rules by the IRS on audit.