IRS Corrects Typo In Regs On Capitalization Of Policy Acquisition Expenses.

The Service has issued a correction to the final regulations (T.D. 8456) under section 848 relating to the requirement that insurance companies capitalize specified policy acquisition expenses. In reg. section 1.848-2(i)(4)(iii)(C), the language "Calculate the ratio between the results in paragraphs (i)(4)(ii)(A) and (B) of this section for each agreement;" is replaced by the language "Calculate the ratio between the results in paragraphs (i)(4)(iii)(A) and (B) of this section for each agreement;". (For a summary of the regulations, see Tax Notes, Jan. 4, 1993, p. 38.)

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[4830-01-u]

DEPARTMENT OF THE TREASURY

Treasury Decision 8456

RIN 1545-AQ14

AGENCY: Internal Revenue Service, Treasury.

ACTION: Correcting amendment.

SUMMARY: This document contains a correction to the final regulations (T.D. 8456), which were published Tuesday, December 29, 1992 (57 FR 61813), relating to the requirement that insurance companies capitalize specified policy acquisition expenses for tax purposes.

EFFECTIVE DATE: December 29, 1992.

FOR FURTHER INFORMATION CONTACT: Gary Geisler (202) 622-3970, (not a toll-free call).

SUPPLEMENTARY INFORMATION:

BACKGROUND

The final regulations that are the subject of this correction contains final income tax regulations under section 848 of the Internal Revenue Code.

NEED FOR CORRECTION

As published, T.D. 8456 contains an error which may prove to be misleading and is in need of clarification.

LIST OF SUBJECTS IN 26 CFR PART 1

Income taxes, Reporting and recordkeeping requirements. PART 1 -- INCOME TAX; TAXABLE YEARS BEGINNING AFTER DECEMBER 31, 1953

Accordingly, 26 CFR part 1 is corrected by making the following correcting amendment:

Paragraph 1. The authority citation for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 2. In section 1.848-2(i)(4)(iii)(C), the language "Calculate the ratio between the results in paragraphs (i)(4)(ii)(A) and (B) of this section for each agreement;" is removed and the language "Calculate the ratio between the results in paragraphs (i)(4)(iii)(A) and (B) of this section for each agreement;" is added in its place.

Jacquelyn B. Burgess