Treasury and IRS release 2014-2015 Priority Guidance Plan

Tax Insights
from Insurance
Treasury and IRS release 2014-2015
Priority Guidance Plan
September 9, 2014
In brief
The Treasury and IRS recently released the 2014-2015 Priority Guidance Plan (PGP), which identifies 317
projects as published guidance priorities for the plan year ending June 2015, down from 324 projects
originally identified as priorities for the plan year ending June 2014. The plan includes projects that will
address a variety of issues including international taxation, employee benefits, health care, and seven
items that are specific to the insurance industry. The plan also includes more routine guidance that is
published each year.
computed under AG 43
should be taken into
account for purposes of the
reserve ratio test under §
816(a) and the statutory
reserve cap under §
807(d)(6) (Carried over);
In detail
The 2013-2014 PGP included 9
insurance-specific items, three
of which were closed by
publication, one of which was
closed without publication, and
five of which carried over to the
2014-2015 Plan. In addition,
two new items were added, for a
total of seven insurance items
on the 2014-2015 Plan. The
insurance specific items are set
forth below:
Final regulations under § 72
on the exchange of property
for an annuity contract.
Proposed regulations were
published on October 18,
2006 (Carried over);
Guidance on annuity
contracts with a long-term
care insurance rider under
§§ 72 and 7702B (Carried
Guidance clarifying
whether the Conditional
Tail Expectation Amount
Guidance on exchanges
under § 1035 of annuities
for long-term care
insurance contracts
(Carried over);
Regulations under § 7702
defining cash surrender
value (Carried 0ver);
Guidance providing de
minimis relief under § 833
(New for 2014-2015); and
Guidance relating to captive
insurance companies (New
for 2014-2015).
Of the new items, guidance
providing relief under § 833 for
Blue Cross organizations that do
not satisfy the Medical Loss
Ratio requirement of §
833(c)(5) was anticipated in
final regulations that were
published under that provision
in early 2014. It is not yet
known what issues will be
addressed concerning captive
insurance companies, but the
addition of this item to the PGP
is unsurprising due to the IRS
loss in Rent-A-Center v.
The 2013-2014 Priority
Guidance Plan included four
insurance specific items which
did not carry forward to the
2014-2015 plan:
 Revenue Ruling under § 801
addressing the application of
Revenue Ruling 2005-40 or
Revenue Ruling 92-93 to
health insurance
arrangements that are
sponsored by a single
employer. PUBLISHED
06/09/14 in IRB 2014-24 as
REV. RUL. 2014-15
(RELEASED 05/08/14)
Tax Insights
 Revenue Ruling on the
determination of the company's
share and policyholder's share of
the net investment income of a life
insurance company under § 812.
PUBLISHED 02/24/14 in IRB
2014-09 as REV. RUL. 2014-07
(RELEASED 02/04/14).
 Final regulations under § 833 to
establish the method to be used by
Blue Cross Blue Shield entities in
determining the medical loss ratio
required by that section. Proposed
regulations were published on May
13, 2013. PUBLISHED 01/07/14 in
FR as TD 9651.
 Guidance to clarify which table to
use for § 807(d)(2) purposes when
there is more than one applicable
table in the 2001 CSO mortality
The 2014-2015 PGP also lists a
number of non-insurance specific
projects that may be of interest to
insurance companies, including
projects in the areas of employee
benefits, executive compensation,
financial products, international tax,
and transfer pricing.
The takeaway
The new Priority Guidance Plan
highlights guidance projects to which
the Treasury and IRS will devote
resources in 2014-2015. Although
there are no deadlines for guidance to
be issued under the plan, insurance
companies should be aware of
developments on projects -particularly insurance projects -- that
may be of interest for their business.
Let’s talk
For a deeper discussion, please contact:
Anthony DiGilio
Office: 703-918-4812
Mobile: 202-253-9028
[email protected]
Mark Smith
Managing Director
Office: 202-312-7518
Mobile: 202-412-2415
[email protected]
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