Switch of Mutual Blue Cross- Blue Shield to Stock Insurance Company Is a Material Change, Eliminating Breaks
Author: Staff Editors.
Source: Volume 19, Number 05, May/June 2006 , pp.51-54(4)
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Abstract:
In TAM 200607020, the IRS considered whether the conversion of a not-for-profit mutual insurance company to a for-profit stock insurance company was a material change in its structure or operations under Section 833(c)(2)(C). Having concluded that there was a material change, the Service then asks if this negates the application of Sections 833(a)(2) and (3) to Taxpayer and Taxpayer’s subsidiaries. Having concluded that the change takes away the benefits of those sections, the Services asks if the conversion precludes the benefits of TRA ’86, section 1012. This issue was also resolved to the detriment of the Taxpayer.Keywords:
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