Taxes

  • Pete Stark
  • transfer-for-value rule of section 101(a)(2)

1950s

  • 1958 – LR – Life Insurance and Federal Taxes, by Daniel Candee Knickerbocker Jr. – 10p
    • Finally, there is the policy question. Even if Congress has not yet admitted its belief in insurance it may well do so in the future. The argument of social desirability is not wholly implausible and one can hardly foretell the result if our legislators are ever again subjected to the vehemence of that agent from Cowley, Wyoming, who once told them that any proposal to tax life insurance is dangerous, that to in any way, directly or indirectly, discourage the purchase of legal reserve life insurance … is only to dignify and encourage indolence and irresponsibility throughout our land.20 .
      • 20 Testimony of Grant Taggart, Hearings on Revenue Revision of 1942 Before the House Committee on Ways and Means, 77th Cong., 2d Sess. 2384-85 (1942)

1960s

  • 1965 – LR – Treatment of Tax-Exempt Interests in the Taxation of Life Insurance Companies, by Michael M. Boone – 10p

1970s

1980s

  • 1981 – GAO – Billions Of Dollars Are Involved In Taxation Of The Life Insurance Industry — Some Corrections In The Law Are Needed – 242p
  • 1982 – GAO – Modified Coinsurance Used to Reduce Taxes – 9p
  • 1982 – JCT – General Explanation of the Revenue Provisions TEFRA – jcs-38-82
  • 1983 – JCT-  Comparison of Present Law, A Discussion Proposal and Possible Clarifications….relating to the tax treatment of life insurance companies and their products
  • 1983 0311 – GOV (Senate) – Taxation of Financial Services Industry – [PDF-356p-Senate-Link, VIDEO-?]
  • 1984 – DOT – US Treasury Department – The Taxation of Income Flowing through Life Insurance Companies, U.S. Treasury Department – 80p
  • 1984 0131 – GOV (Senate) – Tax Treatment of Life Insurance Products and Policyholders, John Chafee (R-RI) – [PDF-359p-GooglePlay, VIDEO-?]
    • Senate – Committee on Finance
    • p5 – II . DESCRIPTION OF PROVISIONS OF S. 1992 – A. Definition of Life Insurance Contract – Present Law
      • Generally, there is no comprehensive definition of a life insurance contract that applies for all tax purposes.
      • 1035
      • In the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), Congress enacted temporary guidelines for determining whether flexible premium life insurance contracts (e.g., universal life or adjustable life contracts) qualify as life insurance contracts for purposes of the exclusion of death benefits from income.
  • 1988 0927 – GOV – Overview of federal tax treatment of life insurance companies and 1988 interim Treasury Department report: scheduled for a hearing before the Subcommittee on Select Revenue Measures of the Committee on Ways and Means on 

1990s

2000s

  • 2005 11 – President George W. Bush – Report of the President’s Advisory Panel on Federal Tax Reform – Simple, Fair, and Pro-Growth: Proposals to Fix America’s Tax System – 290p
  • 2006 12 – CRS – GOV (Senate) – Committee on the Budget – Tax Expenditures: Compendium of Background Material Material on Individual Provisions – [link-download-805p]
    • which issued its final report in November 2005, recommended elimination of the exemption on life insurance investment earnings. Instead the Advisory Panel favored savings incentives which would treat various investment vehicles in a more neutral manner. Congress has enacted no legislation which would implement recommendations of the Advisory Panel.
  • p119 – The Save for Retirement accounts would replace existing IRAs, Roth IRAs, Nondeductible IRAs, deferred executive compensation plans, and tax-free “inside buildup” of the cash value of life insurance and annuities.
  • Contributions would be made with after-tax dollars like current law Roth IRAs and earnings would grow tax free. 

2005 11 – President George W. Bush – Report of the President’s Advisory Panel on Federal Tax Reform – Simple, Fair, and Pro-Growth: Proposals to Fix America’s Tax System – 290p

  • On November 1, 2005, The President’s Advisory Panel on Federal Tax Reform (“Panel”) submitted its report (“Report”) to the Secretary of the Treasury.1
  • At 272 pages, this is the most important and wide-ranging plan to reform the United States federal tax system since Blueprints for Basic Tax Reform (1977).2

2006 – LR – The Report of the President’s Advisory Panel on Federal Tax Reform: A Critical Assessment and a Proposal, by Reuven S. Avi-Yonah – 36p-ssrn.com-link

WORDS and CONCEPTS
818(C), ModCo, Guideline Level Premium, Guideline Single Premium, MEC, TEFRA, DEFRA, CVAT, GPT, 7702, 101, Corridor, Inside Buildup Resources
Life Insurance and Modified Endowments Under Internal Revenue Code Sections 7702 and 7702A, Second Edition -Chris DesRochers, John T. Adney, Brian King and Craig Springfield. 2015

§7702. Life insurance contract defined https://uscode.house.gov/view.xhtml?path=/prelim@title26/subtitleF/chapter79&edition=prelim