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: A discussion of the Open Transaction Doctrine and how it was applied to prevent current inclusion of taxable gains resulting from the sale of stock acquired in a demutualization.

Description: Guidance and interpretation regarding reasonable mortality charge requirement of Section 7702, based from IRS Notice 2004-61, 2004-41 I.R.B. 596 of October 12, 2004.

Description: Discussion of private letter tax rulings on the definition of Cash Surrender Value for purposes of interpreting the definition of life insurance for the policyholder's taxation of the contracts.

Description: The article addresses the safe harbor guidance provided in Notice 2016-63 for 2017 CSO contracts satisfying the section 7702 reasonable mortality requirements

Description: In March 2010, Congress codified the judicial economic substance doctrine in an effort to raise revenue as part of the health care reform legislation.1 The law provides for strict liability penalties of 20 percent for understated taxes and refund claims that result from transactions that lack economic substance. In July 2011, the commissioner of the Large Businessand International Division LB&I of the IRS evidently recognized this state of uncertainty and issued very helpful guidance to all LB&I examiners to fill the void on guidance for economic substance..

Description: The article provides an overview of the federal tax treatment of long-term care insurance contracts, including a brief history of the tax treatment of long-term care insurance, the requirements that must be satisfied in order to be treated as qualified long-term care insurance under the Internal Revenue Code, and a brief discussion of qualified long-term care combination products and chronic and terminal illness accelerated death benefits offered under life insurance contracts.

Description: The article discusses the recent final and proposed regulations published by the IRS and Treasury on the required minimum distribution rules for qualified plans, which implement changes made by SECURE 1.0 and SECURE 2.0. The article is intended to identify the important rules in the final regulations, provide a framework for determining how the rules apply to beneficiaries of qualified plans and IRAs, describe the key differences between the earlier 2022 proposed regulations and the final regulations, and it summarizes the SECURE 2.0 provisions contained in the new proposed regulations.

Description: Discussion about the recent activities of the Taxation Section and its council and plans for the future. The project of the NPT [Necessary Premium Test] task force was discussed.

Description: The Tidbit summarizes LTRs 201609008 and 201613016 and discusses the definition of insurance under the tax code in light of these new pieces of guidance from the IRS.