Mr. Cope monitors the development of U.S. tax law daily through postings on government websites, daily tax publications, monthly tax journals, tax newsletters, tax conferences and meetings of professionals organizations in New York and Washington. Each month he publishes the Tax Insights Blog, which describes and analyzes significant U.S. tax developments (e.g., judicial decisions, regulations, proposed tax legislation) having cross-border tax consequences. The blog's content should be of interest to U.S. businesses with foreign operations and businesses headquarted outside the United States with U.S. investments or U.S. operations.
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Circuit Court Addresses Proper Year of Deduction for Mutual Insurance Company Dividends
On April 9, 2015, the Court of Appeals for the Federal Circuit issued its opinion in Mass. Mutual Life Ins. Co. v. United States. The case considers the proper year for the deduction of dividends paid by MassMutual to certain of its policyholders. In reaching its decision in favor of the taxpayer, the Court of Appeals for the Federal Circuit distinguishes the recent decision of the Second Circuit in New York Life Insurance Company v. United States, which also considered the proper year for the deduction of various dividends paid by that company to its policyholders.
Recent Case Demostrates Timing Matters When Claiming Deductions
On August 1, 2013, the Court of Appeals for the Second Circuit affirmed a district court decision in the case of New York Life Insurance Company v. United States ("New York Life"). The District Court had agreed with the government that New York Life had prematurely accrued certain policyholder dividends. The case is significant because it offers insights into the application of the "all events” test, which is the well-known and widely applied U.S. tax accounting rule for determining the proper year for the deduction of a liability.