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

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: 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: 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: 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 some of the issues the IRS and insurance companies are grappling with in the tax compliance and examination process relating to bad debts, arising from the 2008 to 2009 period, that led to the IRS and the industry agreeing to try to resolve them through the Industry Issue Resolution, or IIR, program.

Description: This article presents a high-level overview of the Federal Income tax rules in section 382 regarding limitations on the use of losses after an ownership change takes place and summarizes problems and issues for the insurance industry in proposed regulations under section 382 as summarized in comments made by the industry and the ACLI

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