Internal Revenue Code sections 101(j) and 6039I, enacted under the Pension Protection Act of 2006 (PPA), require employers holding certain life insurance policies to provide notice to their insured employees and directors regarding the existence of such policies. Employers must also provide notice to the IRS. IRC § 101(j) eliminates the tax-free treatment of such policies where consent is not obtained from the insured individual.
IRS Notice 2009-48, effective June 15, 2009, outlines the reporting and notice requirements for employer-owned life insurance (EOLI) policies, also commonly referred to as corporate-owned life insurance (COLI) or bank-owned life insurance (BOLI), issued after August 17, 2006.
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Published June 11th, 2009 at 11:58 am in Employer-Owned Life Insurance with 1 comments
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New final regulations address the tax treatment for certain types of employer-owned life insurance (EOLI) and related reporting requirements. Businesses should review carefully their current situation relating to EOLI to ensure compliance and consider planning options.
Specifically, businesses should use these new regulations to help determine whether income from EOLI counts as taxable income and if an entity is required to report this type of insurance as detailed in the new final regulations. There are several requirements for exemption from taxation on EOLI income relating to specific situations of employment. For example, the person to whom the policy is issued must be an employee at the time of issuance, and the employee must be notified and give consent for the policy to qualify for income exemption.
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Published January 6th, 2009 at 2:47 pm in Employer-Owned Life Insurance with no comments
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