TaxNewsFlash-Exempt Organizations

November 6, 2008
No. 2008-109

PRINTABLE VERSION

Final Regulations on Information Reporting for Employer-Owned Life Insurance Contracts

Final regulations (T.D. 9431) published today in the Federal Register concern information reporting under section 6039I for employer-owned life insurance contracts. Today’s final regulations adopt regulations proposed in November 2007 without substantive change and remove the corresponding temporary regulations.

To make the regulations more useful to taxpayers, today’s release sets forth the information that is required to be reported under section 6039I.

For an electronic version of today’s regulations (nine pages): T.D. 9431

Summary

The Pension Protection Act of 2006 added section 6039I to the Code, to require taxpayers to report certain information concerning employer-owned life insurance contracts.

In November 2007, temporary and proposed regulations were issued to provide taxpayers with immediate guidance as to how to satisfy the requirements under section 6039I. The regulations applied for taxpayers that are engaged in a trade or business and that are directly or indirectly a beneficiary of a life insurance contract covering the life of an insured who is an employee of that trade or business on the date that the life insurance contract is issued.

In January 2008, the IRS released Form 8925, Report of Employer-Owned Life Insurance Contracts, for taxpayers to use to comply with the reporting requirements under section 6039I.

Concerning the proposed regulations, no public hearing was requested or held, and the IRS received comments from one taxpayer primarily concerning the notice and consent requirements under section 101(j)—rather than section 6039I. Thus, the final regulations adopt the proposed regulations without substantive change.

T.D. 9431 is published in the Federal Register on Thursday, November 6, 2008—which is also their effective date.

For more information, contact Rick Speizman, National Partner-In-Charge, KPMG’s Exempt Organizations Tax Practice (ExoTax), at (202) 533-3084 or rspeizma@kpmg.com

To print a copy of this TaxNewsFlash article, go to: File>Print>Preferences or Properties>Landscape.

ANY TAX ADVICE IN THIS COMMUNICATION IS NOT INTENDED OR WRITTEN BY KPMG TO BE USED, AND CANNOT BE USED, BY A CLIENT OR ANY OTHER PERSON OR ENTITY FOR THE PURPOSE OF (i) AVOIDING PENALTIES THAT MAY BE IMPOSED ON ANY TAXPAYER OR (ii) PROMOTING, MARKETING OR RECOMMENDING TO ANOTHER PARTY ANY MATTERS ADDRESSED HEREIN.

The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.

The KPMG logo and name are trademarks of KPMG International.

KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever.

The information contained in TaxNewsFlash-Exempt Organizations is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Direct comments, including requests for subscriptions, to US-KPMGWNT@kpmg.com. For more information, contact KPMG’s Federal Tax Legislative and Regulatory Services Group at + 1 202.533.4366, 2001 M Street NW, Washington, DC 20036-3310.

To unsubscribe from TaxNewsFlash-Exempt Organizations, reply to US-KPMGWNT@kpmg.com and type ‘Exempt Organizations: Unsubscribe' in the subject line, then click on the SEND button.

Privacy | Legal