LRA Updates

TAX DEVELOPMENTS IRS Issues Private Letter Ruling Affirming that a Transfer of Insurance Policies from a Parent to a Subsidiary Retains Tax Exempt Status On July 2, the IRS publicly released PLR-118450-18 (PLR 202126003) regarding a contemplated transfer of life insurance contracts within a consolidated group of corporations. The PLR involved the Parent and three…

TAX DEVELOPMENTS Groom Law Group Asks IRS to Provide Guidance on Repurposing Surplus VEBA Assets On May 28, Groom Law Group principals Louis Mazawey and Kathryn Bjornstad Amin sent a letter to the IRS, recommending that Treasury and the IRS publish official guidance confirming that the 100% excise tax on VEBA reversions would not apply…

TAX DEVELOPMENTS Biden Releases FY 2022 Budget Proposal On May 28, President Biden released his Fiscal Year 2022 budget proposal, Budget of the U.S. Government. As expected, The American Jobs Plan and The American Families Plan were two primary elements of the budget proposal. We covered each of these plans separately when they were initially…

TAX DEVELOPMENTS Biden Administration Tax Policy Update As we reported last month, the Biden Administration released an infrastructure plan and the Made in America Tax Plan. On April 7, the Treasury Department released a report further describing this plan. Corporate tax reforms outlined in this plan include On April 28, the Biden Administration released another…

LEGISLATIVE DEVELOPMENTS Biden Administration Unveils Infrastructure Plan On March 31, the Biden Administration released a fact sheet on what it calls “The American Jobs Plan.”  The plan identifies the following priorities: The bottom of the press release includes a tax plan that the Biden Administration separately identifies as the “Made in America Tax Plan” and…

LEGISLATIVE DEVELOPMENTS COVID Relief Legislation – American Rescue Plan (HR 1319) On February 27, the House voted to pass the American Rescue Plan Act of 2021 (HR 1319), which is the Biden administration’s $1.9 trillion stimulus package. The legislation does not appear to include any provisions that will impact employer-owned life insurance or tax laws…

LEGISLATIVE DEVELOPMENTS Amendment to IRC §  7702 – Minimum Rate of Interest On December 27, President Trump signed the Consolidated Appropriations Act (“CAA”) into law. The CAA combined COVID-19 stimulus measures and various other budget appropriations. Section 205 of the CAA updates the minimum rate of interest for IRC § 7702 testing for life insurance…

TAX DEVELOPMENTS Biden Administration’s Business Tax Priorities During the course of his campaign, President-elect Joe Biden identified numerous political and legislative priorities, ranging from pandemic response to environmental initiatives. With regard to taxation, the Biden campaign identified various policy priorities, and a number of leading accountancies, including KPMG, PWC, E&Y, Deloitte, and Grant Thornton, have…

LEGISLATIVE DEVELOPMENTS California Privacy Rights Act of 2020 Approved by Voters California voters approved the California Privacy Rights Act of 2020 (“CPRA”), which will further strengthen data privacy protections in the state. The CPRA includes the following noteworthy elements: While the CPRA expands privacy laws in California, it does not repeal or replace the California…

REGULATORY DEVELOPMENTS Banking Regulators Release Final Rule for TLAC Holdings of Advanced Approaches Banks On October 28, the FDIC, FRB and OCC issued a joint final rule for TLAC holdings of advanced approaches banks. It amends the capital rules to require advanced approaches banking organizations to deduct from regulatory capital certain investments in unsecured debt…