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: Taxing Times, September 2006, Volume 2, Issue No. 2.

Description: This article Provides a description of an IRS Directive that provides a safe harbor tax reporting position for computing tax reserves for pre-2018 tax years for annuity contracts subject to AG43 and VM-21 and life insurance contracts subject to VM-20 Principal Based Reserves methods. The safe harbor is required to be implemented on the 2017 tax return, with certain spread amounts in some cases to future tax years starting in 2018.

Description: Discusses five subjects, including proposed IASB discussion paper, split-dollar life insurance, penalties for paid tax preparers, statutory reserves for insurers, and NAIC securitization initiatives.

Description: We frequently are asked what to do when a company has reported aggregate estimates of tax reserves on the tax return, instead of tax reserves computed precisely according to the requirements of the Internal Revenue Code, and the IRS has challenged the reserve deduction. Other sections of this article also cover IRS rulings on the treatment and valuation of an insurance company stock purchased as an asset acquisition and COLI life insurance.

Description: The article summarizes and comments on a recent IRS Chief Counsel Advice that addressed how the proration formula works for purposes of the separate account dividends received deduction in the context of a partnership structure. The article explains the historical background of the proration formula as it appeared in the 1959 Act and the differences between how the applies and affects the dividends received deduction in the partnership structure versus the more tradition RIC structure.

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 article addresses changes to the IRS Appeals Conference.

Description: A discussion about foreign currency hedging, foreign insurance excise tax, taxation of credit default swaps and bad debts.

Description: A discussion of: IRS requirement disclosures of uncertain tax positions, disallowed interest reductions on earnings and profits, and tax standards for partial worthlessness deductions.