tax guidance

 

Private Letter Rulings and Technical Advice Memoranda

 
 

Other IRS Guidance

  • Industry Issues Resolution

Industry representations on IIR projects dealing with bad debts, variable annuity hedging, and principle-based reserves

  • Regulations

Submitted comments on a variety of proposed regulations, e.g., I.R.C. § 848, life/nonlife consolidation

  • Revenue Procedures and Revenue Rulings

Instrumental in IRS Issuance of various rulings such as Rev. Proc. 92-57 dealing with policyholder tax consequences on insurance insolvency restructuring

  • Change in Accounting Method Approvals

Submitted numerous requests for approval of a change in accounting method, e.g., dealing with an insurance company change in tax status and tax hedging

  • Recognition of Tax-Exempt Status

Filed a request for an entity seeking tax-exempt status, for example, under section I.R.C. § 501(c)(3), (c)(4) and (c)(15)

 
 

Settled Cases

  • Premera Blue Cross v. United States, Docket No. 05-01301-JCC (W.D. Wash.) (Whether Blue Cross organization is entitled to loss deductions for terminations of subscriber contracts held as of January 1, 1987, when it became taxable).
     
  • Pacific Life Ins Co v. United States, Docket No. 2:03-cv-04643-PJW (C.D. Cal. 2005) (Whether company is entitled to deductions for increases in a premium stabilization reserve);
     
  • CUNA Mutual Ins Soc v. United States, No. 3:07-cv-00253-bbc (W.D. Wis.) (Treatment of 20 percent unearned premium reserve haircut transition rule);
     
  • Tennessee Rural Health Improvement Association v. United States, No. 1:03cv0015 (M.D. Tenn.) (Whether association qualifies as an exempt organization under I.R.C. § 501(c)(4) or as a fraternal benefit society exempt from tax under I.R.C. § 501(c)(8));
     
  • MBIA Inc. v. Commissioner, Docket No. 5429-99 (U.S. Tax Court) (Addressing disallowance of $22 million in deductions under I.R.C. § 265 and disallowance of deductions respecting reserve treatment of refunding credits; both issues fully conceded by IRS);
     
  • Reliance Standard Life Ins Co v. United States, Civil No. 98-3134 (E.D. Pa.) (Addressing whether taxpayer was entitled to carryovers involving amortization of insurance contracts; settled with U.S. Department of Justice);
     
  • Federated Mutual Ins Co v. United States, Civil No. 98-CV-12910RHK/FLN (D. Minn.) (Addressing whether estimated salvage and subrogation should be taken into account in computing pre-1990 losses incurred under I.R.C. § 832(b)(5)(A)(iii), and addressing whether taxpayer is entitled to relief under § 11305(c)(2) of Pub. L. 101-508; settled with U.S. Department of Justice);
     
  • The St. Paul Companies, Inc. v. United States, No. 99-689 T (U.S. Court of Federal Claims) (Addressing the sufficiency of a claim for refund; fully conceded by U.S. Department of Justice);
     
  • Lone Star Life Ins Co v. Commissioner, Docket No. 14781-96 (U.S. Tax Court) (Settled with IRS);
     
  • Globe Life And Accident Ins Co v. United States, No. 03-5034 (U.S. Court of Appeals for the Federal Circuit) (Settled with U.S. Department of Justice on appeal from 54 Fed. C1. 132 (2002)) (Whether agency relationships may be valued and amortized);
     
  • Utica Mutual Ins Co v. Commissioner, Nos. 2402-01 and 2403-01 (U.S. Tax Court) (Whether the IRS has abused its discretion in changing the taxpayer’s method of accounting for determining discounted loss reserves);
     
  • Transamerica Corp v. Commissioner, Nos. 8455-00 and 8456-00 (U.S. Tax Court) (Reserve and original issue discount issues) (Co-counsel);
     
  • Luba Mutual Holding Company v. Commissioner, No. 024675-12 (Tax Court) (When may taxpayers claim a policyholder dividend deduction.); and
     
  • AXA Financial Inc. v. United States, No. 12-cv-00626 (Fed. Cl.) (What is the appropriate period for calculating overpayment interest.)
 
 

Decided Cases

  • AmBase Corporation v. United States., 731 F.3d 109 (2d Cir. 2013), 2013 WL 4779643 (Thrift entitled to additional bad debt reserve deduction to the extent of other adjustments to taxable income.)
  • Liberty Mutual Ins Co v. United States, 532 F. Supp.2d 248 (D. Mass. 2008) (Held that insurer is entitled to gross up closing 1990 loss reserves for salvage and subrogation netted in annual statement reserves, and to fresh start exclusion for all prior year estimated salvage and subrogation under the transition rule of sec. 11305 of the Revenue Reconciliation Act of 1990);
  • Capital Blue Cross v. Commissioner, 431 F.3d 117 (3d Cir. 2005) (Held that Blue Cross organization is entitled to loss deductions for terminations of subscriber contracts held as of January 1, 1987, when it became taxable);
  • Travelers Ins Co v. United States, 46 Fed. Cl. 458 (2000) (Five memoranda prepared by the company’s tax department ruled admissible under the business records exception to the hearsay rule);
  • United Parcel Service of America, Inc. v. Commissioner, 254 F.3d 1014 (11th Cir. 2001), rev’g T.C Memo 1999-268 (Reversed Tax Court’s holding that the establishment of an off-shore reinsurance company was without economic substance and a sham);
  • Amicus Curiae Brief of AmBase Corp in Support of Petitioner, Atlantic Mutual Ins Co v. Commissioner, 523 U.S. 382 (1998) (No. 97-147), aff’g 111 F.3d 1056 (3d Cir. 1997) (Held that “reserve strengthening” included any net additions to property and casualty insurer’s loss reserves, not just increases from changes in methods or assumptions used to compute them);
  • Filed Amicus Curiae in support of petitioner's position in United Parcel Service of America, Inc. v. Commissioner, 254 F.3d 1014 (11th Cir. 2001), rev’g T.C Memo 1999-268 (Reversed Tax Court’s holding that the establishment of an off-shore reinsurance company was without economic substance and a sham);
  • Amicus Curiae Brief of AmBase Corp in Support of Petitioner, Atlantic Mutual Ins Co v. Commissioner, 523 U.S. 382 (1998) (No. 97-147), aff’g 111 F.3d 1056 (3d Cir. 1997) (Held that “reserve strengthening” included any net additions to property and casualty insurer’s loss reserves, not just increases from changes in methods or assumptions used to compute them);
  • Lone Star Life v. Commissioner, T.C. Memo 1997-465 (Notice of deficiency held timely issued to insurance company because it was bound by Form 872s, Consent to Extend the Time to Assess Tax, that were executed by its parent);
  • Trans City Life Ins Co v. Commissioner, 106 T.C. 274 (1996), representing American Council of Life Insurers in filing amicus brief concerning scope and application of I.R.C. § 845 to reinsurance (Held that the IRS abused its discretion in applying I.R.C. § 845 to disallow small life insurance company deduction);
  • Lone Star Life v. Commissioner, T.C. Memo 1997-465 (Notice of deficiency held timely issued to insurance company because it was bound by Form 872s, Consent to Extend the Time to Assess Tax, that were executed by its parent);
     
  • Trans City Life Ins Co v. Commissioner, 106 T.C. 274 (1996), representing American Council of Life Insurers in filing amicus brief concerning scope and application of I.R.C. § 845 to reinsurance (Held that the IRS abused its discretion in applying I.R.C. § 845 to disallow small life insurance company deduction);
  • Travelers Ins Co v. United States, 303 F.3d 1373 (Fed. Cir. 2002), rev’g 35 Fed. Cl. 138 (1996), reh’g granted-in-part and denied-in-part, 319 F.3d 1380 (Fed. Cir. 2003), cert. denied 540 U.S. 819 (2003) (Reversed holding that the IRS abused its discretion in changing accounting method for foreign currency);
     
  • Western National Mutual Ins Co v. Commissioner, 65 F.3d 90 (8th Cir. 1995), aff’g 102 T.C. 338 (1994) (Treasury regulation on reserve strengthening held invalid);
  • Jefferson-Pilot Corp v. Commissioner, 995 F.2d 530 (4th Cir. 1993), aff’g 98 T.C. 435 (1992) (Held that FCC broadcast licenses qualified as franchises);
  • Travelers Ins Co v. United States, 303 F.3d 1373 (Fed. Cir. 2002), rev’g 28 Fed. Cl. 602 (1993), reh’g granted-in-part and denied-in-part, 319 F.3d 1380 (2003), cert. denied, 540 U.S. 819 (2003) (Reversed holding that Taxpayer’s computation of foreign tax credit was proper);
  • Travelers Ins Co v. United States, 25 Cl. Ct. 141 (1992) (Held that prepayment penalties received on mortgages were excludable from gross investment income and retirement of notes held to be sale or exchange of capital asset so amounts qualified as long term capital gain under I.R.C. § 1232);
  • Credit Life Ins Co v. United States (Cl. Ct. Dkt. No. 586-84 T), rev’d, 948 F.2d 723 (Fed. Cir. 1991) (Held that Taxpayer was not entitled to bad debt deduction for uncollectible reinsurance recoverables);
  • Security Benefit Life Ins Co v. United States, 726 F.2d 1491 (10th Cir. 1984), aff’g 517 F. Supp. 740 (D. Kan. 1981) (Held invalid Treasury regulations on taxation of assumption reinsurance transactions);
  • Provident Life and Accident Ins Co v. United States, 334 F. Supp. 2d 1029 (E.D. Tenn. 2004) (Held that IRS could not apply equitable recoupment to treatment of experience rating credits as policyholder dividends in closed years)