Commissioner Says IRS Is Looking At Investor-Owned Life Insurance

The Internal Revenue Service is reviewing arrangements in which investors work through charities to purchase life insurance policies on unrelated third parties, says IRS Commissioner Mark Everson. Everson's comments came in response to a question from Senator Jeff Bingaman, D-NM, on what is called investor-owned life insurance during a Senate Finance Committee hearing on whether tax-exempt organizations are abusing their status. Everson did not elaborate on the IRS review of these arrangements, except to say it is an area of concern. However, J J MacNab, a life insurance analyst who runs a Bethesda, MD-based company called Insurance Barometer, blasts the arrangements, adding that life insurance agent groups are also warning their members against them.