TREASURY ISSUES RULES ON TAXATION OF SPLIT-DOLLAR LIFE INSURANCE.The Treasury Department issued final rules Sept. 11 limiting the benefits of split-dollar life-insurance policies paid by companies for their top executives. Under the new rules, executives who own universal and whole life insurance policies whose premiums are paid by the company will have to pay market rate interest on the premium or tax on the cash accumulated ac·cu·mu·late v. ac·cu·mu·lat·ed, ac·cu·mu·lat·ing, ac·cu·mu·lates v.tr. To gather or pile up; amass. See Synonyms at gather. v.intr. To mount up; increase. in their policies. "Under these rules, companies cannot use split-dollar life-insurance arrangements to provide tax-free compensation to their executives," Pamela Olson, assistant Treasury Secretary for Tax Policy, said. "By insuring that split-dollar arrangements are appropriately taxed, the regulations curb a backdoor See trapdoor. form of executive compensation and promote greater transparency (1) The quality of being able to see through a material. The terms transparency and translucency are often used synonymously; however, transparent would technically mean "seeing through clear glass," while translucent would mean "seeing through frosted glass." See alpha blending. ." The new rules were proposed by Congressional committees after their investigations of how bankrupt BANKRUPT. A person who has done, or suffered some act to be done, which is by law declared an act of bankruptcy; in such case he may be declared a bankrupt. 2. It is proper to notice that there is much difference between a bankrupt and an insolvent. Enron Enron A U.S. energy-trading and utilities company that housed one of the biggest accounting frauds in history. Enron's executives employed accounting practices that falsely inflated the company's revenues, which, at the height of the scandal, made the firm become the seventh paid its executives. The life insurance industry opposed the tax on the accumulated cash and tried to have the tax collection delayed until the termination of the policy. |
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