Order of R. Employees v. Commissioner
United States Tax Court
A mutual insurance company does not lose its right to be taxed as such under sec. 207 (a), I. R. C., merely because its directors, in the exercise of their discretion, accumulated and held, in an account designated "surplus," the excess of premiums over cost for eight years of its existence. The test for determining mutuality is the ownership of the company, its earnings and accumulations, by its policyholders.
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A mutual insurance company does not lose its right to be taxed as such under sec. 207 (a), I. R. C., merely because its directors, in the exercise of their discretion, accumulated and held, in an account designated "surplus," the excess of premiums over cost for eight years of its existence. The test for determining mutuality is the ownership of the company, its earnings and accumulations, by its policyholders. Mutuality is not lost merely because holders of lapsed policies forfeit their right to share in the distribution of accumulated surplus.
1Opinion of the Court
OPINION.
Mellott, Judge:
The issue is: Under which section of the revenue act shall petitioner be taxed ? Respondent has taxed it under section 204 (a) of the Revenue Act of 19362 and similar provisions of the Revenue Act of 1938 and the Internal Revenue Code as an insurance company other than life or mutual. Petitioner contends that it is taxable under section 201 (a) 3 as a life insurance company, though it places its chief reliance upon, and devotes most of its brief to establishing, the fact tha't it is a mutual insurance company and hence taxable under section 207 (a).4
In its reply brief…
2Cases cited12 opinions
- Penn Mutual Life Insurance v. LedererSupreme Court of the United States · 1920
- Greeff v. Equitable Life Assurance Society of United StatesNew York Court of Appeals · 1899
- Huber v. MartinWisconsin Supreme Court · 1906
- United States Life Ins. v. SpinksCourt of Appeals of Kentucky · 1906
- New York Life Insurance v. BowersSupreme Court of the United States · 1931
7 more not listed; retrieve them via the Exa API.
3Cited by24 opinions
- Theodore v. CommissionerUnited States Tax Court · 1962
- Holyoke Mut. Fire Ins. Co. v. CommissionerUnited States Tax Court · 1957
- Mutual Fire, Marine & Inland Ins. Co. v. CommissionerUnited States Tax Court · 1947
- Thompson, Collector of Internal Revenue v. White River Burial Ass'nCourt of Appeals for the Eighth Circuit · 1950
- Estate of Moyer v. Comm'rUnited States Tax Court · 1959
19 more not listed; retrieve them via the Exa API.