Information Reporting on Employer-Owned Life Insurance Contracts, 65981-65982 [E8-26424]
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Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Rules and Regulations
Issued in Kansas City, Missouri, on
October 28, 2008.
James E. Jackson,
Acting Manager, Small Airplane Directorate,
Aircraft Certification Service.
[FR Doc. E8–26235 Filed 11–5–08; 8:45 am]
BILLING CODE 4910–13–P
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9431]
RIN 1545–BG58
Information Reporting on EmployerOwned Life Insurance Contracts
Internal Revenue Service (IRS),
Treasury.
ACTION: Final regulations and removal of
temporary regulations.
AGENCY:
ebenthall on PRODPC68 with RULES
SUMMARY: This document contains final
regulations concerning information
reporting on employer-owned life
insurance contracts under section 6039I
of the Internal Revenue Code (Code).
This final regulation is necessary to
provide taxpayers with guidance as to
how the requirements of section 6039I
should be applied. These regulations
generally apply to 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 the trade or business on the date the
contract is issued.
DATES: Effective Date: These regulations
are effective on November 6, 2008.
Applicability Date: These regulations
are applicable for tax years ending after
November 6, 2008.
FOR FURTHER INFORMATION CONTACT:
Linda K. Boyd, 202–622–3970 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background and Explanation of
Provisions
The Pension Protection Act of 2006,
Public Law 109–280, 120 Stat. 780
(2006), added sections 101(j) and 6039I
to Code concerning employer-owned
life insurance contracts.
Section 101(j)(1) provides that, in the
case of an employer-owned life
insurance contract, the amount of death
benefits excluded from gross income
under section 101(a)(1) shall not exceed
an amount equal to the sum of the
premiums and other amounts paid by
the policyholder for the contract. For
this purpose, an employer-owned life
insurance contract is a life insurance
VerDate Aug<31>2005
13:44 Nov 05, 2008
Jkt 217001
contract that (i) is owned by a person
engaged in a trade or business and
under which such person is directly or
indirectly a beneficiary under the
contract, and (ii) covers the life of an
insured who is an employee with
respect to the trade or business on the
date the contract is issued. An
applicable policyholder is generally a
person who owns an employer-owned
life insurance contract, or a related
person as described in section 101(j)(3).
Section 101(j)(2) provides exceptions
to the general rule of section 101(j)(1) in
the case of certain employer-owned life
insurance contracts with respect to
which certain notice and consent
requirements are met. Those exceptions
are based either on (i) the insured’s
status as an employee within 12 months
of death or as a highly compensated
employee or highly compensated
individual, or (ii) the extent to which
death benefits are paid to a family
member, trust, or estate of the insured
employee, or are used to purchase an
equity interest in the applicable
policyholder from a family member,
trust or estate.
Section 6039I provides that every
applicable policyholder that owns one
or more employer-owned life insurance
contracts shall file a return, at such time
and in such manner as the Secretary
shall prescribe by regulations, showing
for each year the contracts are owned—
(1) The number of employees of the
applicable policyholder at the end of the
year;
(2) The number of such employees
insured under such contracts at the end
of the year;
(3) The total amount of insurance in
force at the end of the year under such
contracts;
(4) The name, address, and taxpayer
identification number of the applicable
policyholder and the type of business in
which the policyholder is engaged; and
(5) That the policyholder has a valid
consent for each insured employee (or,
if not all such consents are obtained, the
number of insured employees for whom
such consent was not obtained).
Section 6039I(c) provides that any
term used in section 6039I that is used
in section 101(j) has the same meaning
given that term by section 101(j).
Sections 101(j) and 6039I apply to life
insurance contracts issued after August
17, 2006, except for a contract issued
after that date pursuant to a section
1035 exchange for a contract issued
before that date. For this purpose, a
material increase in the death benefit or
other material change causes the
contract to be treated as a new contract
except that, in the case of a master
contract within the meaning of section
PO 00000
Frm 00015
Fmt 4700
Sfmt 4700
65981
264(f)(4)(E), the addition of covered
lives is treated as a new contract only
with respect to those additional covered
lives.
On November 13, 2007, the IRS
published temporary regulations in the
Federal Register (TD 9364) (72 FR
63806), which serve as the basis for a
cross-reference notice of proposed
rulemaking (REG–115910–07) (72 FR
63838).
The temporary regulations and notice
of proposed rulemaking provide that the
Commissioner may prescribe the form
and manner of satisfying the reporting
requirements imposed by section 6039I
on applicable policyholders owning one
or more employer-owned life insurance
contracts issued after August 17, 2006.
Pursuant to these regulations, on
January 24, 2008, the IRS released Form
8925, ‘‘Report of Employer-Owned Life
Insurance Contracts’’, for taxpayers to
use to comply with the reporting
requirements of section 6039I.
No public hearing was requested or
held. The IRS received comments from
one taxpayer. Those comments
primarily concern the notice and
consent requirements of section 101(j),
rather than the reporting requirements
of section 6039I. Accordingly, this
Treasury decision adopts the proposed
regulations without substantive change
and removes the corresponding
temporary regulations. In order to make
the regulations more useful to taxpayers,
this Treasury decision sets forth the
information that is enumerated in
section 6039I and required to be
reported under that provision. The IRS
and Treasury Departments will continue
to consider the comments received in
connection with any future published
guidance under section 101(j).
Special Analyses
It has been determined that this
Treasury Decision is not a significant
regulatory action as defined in
Executive Order 12866. Therefore, a
regulatory assessment is not required. It
has also been determined that section
553(b) of the Administrative Procedure
Act (5 U.S.C. chapter 5) does not apply
to this regulation.
In accordance with the Regulatory
Flexibility Act (5 U.S.C. chapter 6), it is
hereby certified that the regulations will
not have a significant economic impact
on a substantial number of small
entities. Even though a substantial
number of small entities may be subject
to the requirements of section 6039I,
these final regulations do not require the
reporting of information other than that
which is specifically required by section
6039I. Further, the burden associated
with completing the prescribed form is
E:\FR\FM\06NOR1.SGM
06NOR1
65982
Federal Register / Vol. 73, No. 216 / Thursday, November 6, 2008 / Rules and Regulations
minimal because the information
required by section 6039I is readily
available. Accordingly, the regulations
will not have a significant economic
impact on a substantial number of small
entities and a regulatory flexibility
analysis is not required.
Pursuant to section 7805(f) of the
Internal Revenue Code, the notice of
proposed rulemaking preceding this
regulation was submitted to the Chief
Counsel for Advocacy of the Small
Business Administration for comment
on its impact on small business.
Drafting Information
The principal author of these
regulations is Linda K. Boyd, Office of
Associate Chief Counsel (Financial
Institutions & Products). However, other
personnel from the IRS and Treasury
Department participated in their
development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and
recordkeeping requirements.
(5) That the applicable policyholder
has a valid consent for each insured
employee (or, if all such consents are
not obtained, the number of insured
employees for whom such consent was
not obtained).
(b) Time and manner of reporting.
Applicable policyholders owning one or
more employer-owned life insurance
contracts issued after August 17, 2006,
must provide the information required
under § 6039I by attaching Form 8925,
‘‘Report of Employer-Owned Life
Insurance Contracts’’, to the
policyholder’s income tax return by the
due date of that return, or by filing such
other form at such time and in such
manner as the Commissioner may in the
future prescribe.
(c) Effective/applicability date. These
regulations are applicable for tax years
ending after November 6, 2008.
§ 1.6039I–1T
[Removed]
■ Par. 3. Section 1.6039I–1T is
removed.
Adoption of Amendments to the
Regulations
Accordingly, 26 CFR part 1 is
amended as follows:
■
PART 1—INCOME TAXES
Paragraph 1. The authority citation
for part 1 is amended by removing the
entry for § 1.6039I–1T, and adding an
entry in numerical order to read in part
as follows:
■
[FR Doc. Z8–21006 Filed 11–5–08; 8:45 am]
Linda E. Stiff,
Deputy Commissioner for Services and
Enforcement.
Approved: October 16, 2008.
Eric Solomon,
Assistant Secretary of the Treasury (Tax
Policy).
[FR Doc. E8–26424 Filed 11–5–08; 8:45 am]
BILLING CODE 4830–01–P
§ 1. 6039I–1 Reporting of certain employerowned life insurance contracts.
Unified Rule for Loss on Subsidiary
Stock
ebenthall on PRODPC68 with RULES
Jkt 217001
33 CFR Part 165
Safety Zone; Christmas Holiday Boat
Parade Fireworks Event, Appomattox
River, Hopewell, VA
[TD 9424]
13:44 Nov 05, 2008
Coast Guard
RIN 1625–AA00
Par. 2. Section 1.6039I–1 is added to
read as follows:
VerDate Aug<31>2005
DEPARTMENT OF HOMELAND
SECURITY
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
ACTION:
Correction
In rule document E8– 21006
beginning on page 53934 in the issue of
Wednesday, September 17, 2008 make
the following corrections:
§1.1502–13
[Corrected]
1. On page 53948, in the first column,
§1.1502–13(a)(4), in the second line ‘‘(4)
Application of other rules of law.’’
should read ‘‘(4) Application of other
rules of law.’’.
■
§1.1502–36
[Corrected]
2. On page 53962, in the third column,
§1.1502–36(c)(8)(ii) at Example 6 (ii)
(A), in the first paragraphs, in the 32nd
line, ‘‘CNOL))’’ should read ‘‘CNOL)’’.
■ 3. On page 53964, in the second
column, §1.1502–36(d)(4)(ii)(A), the
■
PO 00000
Frm 00016
Fmt 4700
Sfmt 4700
Coast Guard, DHS.
Temporary final rule.
AGENCY:
RIN 1545–BB61
(a) Requirement to report. Section
6039I requires every taxpayer that is an
applicable policyholder owning one or
more employer-owned life insurance
contracts issued after August 17, 2006,
to file a return showing the following
information for each year the contracts
are owned—
(1) The number of employees of the
applicable policyholder at the end of the
year;
(2) The number of such employees
insured under such contracts at the end
of the year;
(3) The total amount of insurance in
force at the end of the year under such
contracts;
(4) The name, address, and taxpayer
identification number of the applicable
policyholder and the type of business in
which the policyholder is engaged; and
BILLING CODE 1505–01–D
[USCG–2008–0838]
Authority: 26 U.S.C. 7805 * * *.
Section 1.6039I–1 also issued under 26
U.S.C. 6039I. * * *
■
first sentence, ‘‘(A) Category A, Category
B, and Category C attributes.’’ should
read ‘‘(A) Category A, Category B, and
Category C attributes.’’.
■ 4. On page 53968, in the second
column, §1.1502–36(d)(8) at Example 1
(ii), in paragraphs (A) and (B), ‘‘Example
1’’should read ‘‘Example 1.’’.
■ 5. On page 53970, in the third column,
§1.1502–36(d)(8) at Example 4. (i)(c)
paragraph ‘‘(1)’’ should read, ‘‘1’’.
■ 6. On page the same page, in the
second column, §1.1502–36(d)(8) at
Example 4. (ii)(c) paragraph ‘‘(1)’’
should read,‘‘(1)’’.
■ 7. On page 53974, in the third column,
§1.1502–36(d)(8) at Example 8. (i)(c)(2)
paragraph ‘‘(i)’’ should read, ‘‘(i)’’.
■ 8. On page 53975, in the third column,
§1.1502–36(d)(8) at Example 8. (ii)(c)(2)
paragraph ‘‘(i)’’ should read, ‘‘(i)’’.
■ 9. On page 53977, in the first column,
§1.1502–36(d)(8) at Example 9. (iv)(B)
paragraph ‘‘(1)’’ should read, ‘‘(1)’’.
SUMMARY: The Coast Guard is
establishing a 420-foot radius safety
zone on the Appomattox River in the
vicinity of Hopewell, VA in support of
the Christmas Holiday Boat Parade
Fireworks Event. This action will
protect the maritime public on the
Appomattox River from the hazards
associated with fireworks displays.
DATES: This rule is effective from 8 p.m.
until 9 p.m. on December 6, 2008.
ADDRESSES: Comments and material
received from the public, as well as
documents mentioned in this preamble
as being available in the docket, are part
of docket USCG–2008–0838 and are
available online by going to https://
www.regulations.gov, selecting the
Advanced Docket Search option on the
right side of the screen, inserting USCG–
2008–0838 in the Docket ID box,
pressing Enter, and then clicking on the
item in the Docket ID column. This
E:\FR\FM\06NOR1.SGM
06NOR1
]]>Agencies
[Federal Register Volume 73, Number 216 (Thursday, November 6, 2008)]
[Rules and Regulations]
[Pages 65981-65982]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-26424]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Part 1
[TD 9431]
RIN 1545-BG58
Information Reporting on Employer-Owned Life Insurance Contracts
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations and removal of temporary regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations concerning
information reporting on employer-owned life insurance contracts under
section 6039I of the Internal Revenue Code (Code). This final
regulation is necessary to provide taxpayers with guidance as to how
the requirements of section 6039I should be applied. These regulations
generally apply to 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 the
trade or business on the date the contract is issued.
DATES: Effective Date: These regulations are effective on November 6,
2008.
Applicability Date: These regulations are applicable for tax years
ending after November 6, 2008.
FOR FURTHER INFORMATION CONTACT: Linda K. Boyd, 202-622-3970 (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Background and Explanation of Provisions
The Pension Protection Act of 2006, Public Law 109-280, 120 Stat.
780 (2006), added sections 101(j) and 6039I to Code concerning
employer-owned life insurance contracts.
Section 101(j)(1) provides that, in the case of an employer-owned
life insurance contract, the amount of death benefits excluded from
gross income under section 101(a)(1) shall not exceed an amount equal
to the sum of the premiums and other amounts paid by the policyholder
for the contract. For this purpose, an employer-owned life insurance
contract is a life insurance contract that (i) is owned by a person
engaged in a trade or business and under which such person is directly
or indirectly a beneficiary under the contract, and (ii) covers the
life of an insured who is an employee with respect to the trade or
business on the date the contract is issued. An applicable policyholder
is generally a person who owns an employer-owned life insurance
contract, or a related person as described in section 101(j)(3).
Section 101(j)(2) provides exceptions to the general rule of
section 101(j)(1) in the case of certain employer-owned life insurance
contracts with respect to which certain notice and consent requirements
are met. Those exceptions are based either on (i) the insured's status
as an employee within 12 months of death or as a highly compensated
employee or highly compensated individual, or (ii) the extent to which
death benefits are paid to a family member, trust, or estate of the
insured employee, or are used to purchase an equity interest in the
applicable policyholder from a family member, trust or estate.
Section 6039I provides that every applicable policyholder that owns
one or more employer-owned life insurance contracts shall file a
return, at such time and in such manner as the Secretary shall
prescribe by regulations, showing for each year the contracts are
owned--
(1) The number of employees of the applicable policyholder at the
end of the year;
(2) The number of such employees insured under such contracts at
the end of the year;
(3) The total amount of insurance in force at the end of the year
under such contracts;
(4) The name, address, and taxpayer identification number of the
applicable policyholder and the type of business in which the
policyholder is engaged; and
(5) That the policyholder has a valid consent for each insured
employee (or, if not all such consents are obtained, the number of
insured employees for whom such consent was not obtained).
Section 6039I(c) provides that any term used in section 6039I that
is used in section 101(j) has the same meaning given that term by
section 101(j).
Sections 101(j) and 6039I apply to life insurance contracts issued
after August 17, 2006, except for a contract issued after that date
pursuant to a section 1035 exchange for a contract issued before that
date. For this purpose, a material increase in the death benefit or
other material change causes the contract to be treated as a new
contract except that, in the case of a master contract within the
meaning of section 264(f)(4)(E), the addition of covered lives is
treated as a new contract only with respect to those additional covered
lives.
On November 13, 2007, the IRS published temporary regulations in
the Federal Register (TD 9364) (72 FR 63806), which serve as the basis
for a cross-reference notice of proposed rulemaking (REG-115910-07) (72
FR 63838).
The temporary regulations and notice of proposed rulemaking provide
that the Commissioner may prescribe the form and manner of satisfying
the reporting requirements imposed by section 6039I on applicable
policyholders owning one or more employer-owned life insurance
contracts issued after August 17, 2006. Pursuant to these regulations,
on January 24, 2008, the IRS released Form 8925, ``Report of Employer-
Owned Life Insurance Contracts'', for taxpayers to use to comply with
the reporting requirements of section 6039I.
No public hearing was requested or held. The IRS received comments
from one taxpayer. Those comments primarily concern the notice and
consent requirements of section 101(j), rather than the reporting
requirements of section 6039I. Accordingly, this Treasury decision
adopts the proposed regulations without substantive change and removes
the corresponding temporary regulations. In order to make the
regulations more useful to taxpayers, this Treasury decision sets forth
the information that is enumerated in section 6039I and required to be
reported under that provision. The IRS and Treasury Departments will
continue to consider the comments received in connection with any
future published guidance under section 101(j).
Special Analyses
It has been determined that this Treasury Decision is not a
significant regulatory action as defined in Executive Order 12866.
Therefore, a regulatory assessment is not required. It has also been
determined that section 553(b) of the Administrative Procedure Act (5
U.S.C. chapter 5) does not apply to this regulation.
In accordance with the Regulatory Flexibility Act (5 U.S.C. chapter
6), it is hereby certified that the regulations will not have a
significant economic impact on a substantial number of small entities.
Even though a substantial number of small entities may be subject to
the requirements of section 6039I, these final regulations do not
require the reporting of information other than that which is
specifically required by section 6039I. Further, the burden associated
with completing the prescribed form is
[[Page 65982]]
minimal because the information required by section 6039I is readily
available. Accordingly, the regulations will not have a significant
economic impact on a substantial number of small entities and a
regulatory flexibility analysis is not required.
Pursuant to section 7805(f) of the Internal Revenue Code, the
notice of proposed rulemaking preceding this regulation was submitted
to the Chief Counsel for Advocacy of the Small Business Administration
for comment on its impact on small business.
Drafting Information
The principal author of these regulations is Linda K. Boyd, Office
of Associate Chief Counsel (Financial Institutions & Products).
However, other personnel from the IRS and Treasury Department
participated in their development.
List of Subjects in 26 CFR Part 1
Income taxes, Reporting and recordkeeping requirements.
Adoption of Amendments to the Regulations
0
Accordingly, 26 CFR part 1 is amended as follows:
PART 1--INCOME TAXES
0
Paragraph 1. The authority citation for part 1 is amended by removing
the entry for Sec. 1.6039I-1T, and adding an entry in numerical order
to read in part as follows:
Authority: 26 U.S.C. 7805 * * *.
Section 1.6039I-1 also issued under 26 U.S.C. 6039I. * * *
0
Par. 2. Section 1.6039I-1 is added to read as follows:
Sec. 1. 6039I-1 Reporting of certain employer-owned life insurance
contracts.
(a) Requirement to report. Section 6039I requires every taxpayer
that is an applicable policyholder owning one or more employer-owned
life insurance contracts issued after August 17, 2006, to file a return
showing the following information for each year the contracts are
owned--
(1) The number of employees of the applicable policyholder at the
end of the year;
(2) The number of such employees insured under such contracts at
the end of the year;
(3) The total amount of insurance in force at the end of the year
under such contracts;
(4) The name, address, and taxpayer identification number of the
applicable policyholder and the type of business in which the
policyholder is engaged; and
(5) That the applicable policyholder has a valid consent for each
insured employee (or, if all such consents are not obtained, the number
of insured employees for whom such consent was not obtained).
(b) Time and manner of reporting. Applicable policyholders owning
one or more employer-owned life insurance contracts issued after August
17, 2006, must provide the information required under Sec. 6039I by
attaching Form 8925, ``Report of Employer-Owned Life Insurance
Contracts'', to the policyholder's income tax return by the due date of
that return, or by filing such other form at such time and in such
manner as the Commissioner may in the future prescribe.
(c) Effective/applicability date. These regulations are applicable
for tax years ending after November 6, 2008.
Sec. 1.6039I-1T [Removed]
0
Par. 3. Section 1.6039I-1T is removed.
Linda E. Stiff,
Deputy Commissioner for Services and Enforcement.
Approved: October 16, 2008.
Eric Solomon,
Assistant Secretary of the Treasury (Tax Policy).
[FR Doc. E8-26424 Filed 11-5-08; 8:45 am]
BILLING CODE 4830-01-P
