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

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

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: Article discusses recent changes in the IRS LB&I Division's examination practices and approach that may affect the work-flow of company actuaries and may present opportunities to resolve tax issues for companies

Description: A discussion of third-party summons, particularly those issued in promoter examinations. Satisfaction of the IRS's request for information outside of court in the most cost-effective manner is usually the best course.

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.

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.