Court shoots down $100 million refund for New York Life
August 6, 2013 by Steven A. Meyerowitz
The U.S. Court of Appeals for the Second Circuit has affirmed a district court’s decision that, with respect to two tax deductions claimed by New York Life, “all events” had not yet occurred to fix the insurer’s liability in the tax years in which it had taken the deductions. Because the insurer’s liability for the dividends was contingent, the circuit court held, it did not satisfy the regulatory requirements for deduction of an accrued expense.
The case
From 1990 through 1995, New York Life Insurance Company, a mutual life insurance company organized under New York law that was a calendar-year, accrual-basis taxpayer, distributed policyholder dividends to policyholders both at set periods and upon the occurrence of certain events, such as the death of the insured, as applicable New York law permitted it to do. Click here to read…
