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
Order of Railway Employees, a Corporation, Petitioner, v. Commissioner of Internal Revenue, Respondent
Order of R. Employees v. Commissioner
Docket No. 110521
United States Tax Court
2 T.C. 607; 1943 U.S. Tax Ct. LEXIS 79;
August 24, 1943, Promulgated
Decision will be entered under Rule 50.
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…
2Cases cited13 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
- Order of R. Employees v. CommissionerUnited States Tax Court · 1943
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