Liberty National Life Insurance Company v. United States

THORNBERRY, Circuit Judge:

Once again 1 we are asked to enter the “fantasy world of life insurance company accounting and taxation.” Western Nat’l Life Ins. Co. v. Commissioner, 51 T.C. 824, 830 (1969). The issue we must decide is whether discounts taxpayer Liberty National Life Insurance Company gave to holders of its industrial life insurance policies who paid at least twenty-six weeks of premiums at one time were “discounts in the nature of interest” within the meaning of I.R.C. § 805(e)(3).

I

A

“Industrial life” insurance originated in nineteenth century England as a means of selling life…