Description: On June 30, 2015, the U.S. Tax Court reaffirmed the viability of the Investor Control Doctrine in Webber v. Commissioner. The case serves as a valuable example of what not to do with regard to the investment of assets supporting a variable life insurance contract purchased through a private placement transaction. In the end, however, the Webber court leaves a lot of questions unanswered—most significantly, the elusive answer to how to define investor control. This article examines the Investor Control Doctrine, as explained and applied by the U.S. Tax Court in Webber, and considers some of the open questions that remain after June 30, 2015.

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: A discussion of the proposed safe harbor with respect to calculations for contracts where the insured reaches age 100.

Description: This article is a discussion of the proposal to tax the inside build-up in life insurance policies and the consequences if it were to be adopted.

Description: Articles on IRS private letter rulings on combination products, IRS treatment of reinsurance under section 845, and IRS waivers for failed contracts under section 7702.

Description: The Internal Revenue Service issued its seminal ruling interpreting Internal Revenal Code section 7702A[c][3][B][i], commonly referred to as the Necessary Premium Test [NPT]. The purpose of the NPT is to shelter certain death benefit increases from material change status, avoiding the 7 pay test's reapplication on their account.

Description: The article summarizes the provisions of H.R. 1 that impact the tax qualification of life insurance contracts and the tax reporting of life settlements

Description: This article explores the complexities and potential problems with respect to tax reserves that could result from a retroactive application of a principle-based reserves PBR approach for life insurance reserves.

Description: This article discusses a new procedure for correcting inadvertent failures to satisfy the diversification requirements applicable to variable annuity and life insurance contracts under section 817h of the Internal Revenue Code.

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.