Description: The Internal Revenue Service “the Service” or “IRS” recently released Technical Advice Memorandum 200939019 “the TAM”. The TAM initially caused a stir among some in the insurance tax industry because it disallows a tax deduction that was permitted on the NAIC Annual Statement hereinafter “NAIC statement”. Specifically, the TAM states that unpaid loss adjustment expenses “LAE” for retiree medical benefits may only be deducted in the tax year in which the benefits are included in income by the employee who earned the benefits, despite the fact the amounts were properly included on the NAIC statement and regardless of deductibility of the unpaid LAE under the Internal Revenue Code “the Code”. This article discusses the memorandum.

Description: Discussions on CIGNA, SEPP failure, investor control, tacking rule, and split-dollar life insurance arrangement are featured.