FROM THE OFFICE OF PUBLIC AFFAIRS
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September 3, 2004
js-1885
Treasury and IRS Supplement Guidance on Source of Income from Life Insurance and Annuities
Today, the Treasury Department and the Internal Revenue Service supplemented earlier guidance related to the source of income received by foreign persons and residents of Puerto Rico from life insurance and annuity contracts issued by U.S. companies through branches in foreign countries and Puerto Rico. Revenue Ruling 2004-75, issued on July 12, 2004, provides that income from payments on such contracts is U.S.-source income subject to U.S. tax. The guidance issued today addresses the timing of application of that revenue ruling by providing that Revenue Ruling 2004-75 will not apply to payments made before 2005 with respect to binding contracts issued on or before July 12, 2004.
"The legal position reflected in Rev. Rul. 2004-75 is correct," said IRS Chief Counsel Donald L. Korb. "However, in view of concerns expressed to Treasury and the IRS about its potential impact on some existing operations, we have concluded that it is appropriate to provide for prospective application of the ruling."
A copy of Rev. Rul 2004-97 is attached.
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REPORTS