Description: This article begins with a brief review of the general requirements of section 7702A and the consequences of MEC status for a life insurance contract and continues with a description of the evolution of the inadvertent MEC correction procedures over the past near decade.

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

Description: This article discusses the important lessons for insurance companies that participate in drafting settlement agreements designed to achieve favorable tax treatment of the settlement payments.

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: These are the updated in the Taxation Section.

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: The article discusses the role played by the "Blue Books" issued by the Congress's Joint Committee on Taxation and the authority accorded them by a recent U.S. Supreme Court decision.

Description: This article summarizes the treatment of changes in the basis for determining life insurance tax reserves under prior law and describes the changes enacted by the Tax Cuts and Jobs Act. It further explains the procedures for changing the basis of computing reserves under the new rules as outlined in Revenue Procedure 2019-10, the IRS’s December 2018 guidance on the subject, and discusses the uncertainties that remain.

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

Description: The article describes changes to the computation of tax reserves as a result of the Tax Cuts and Jobs Act.