Updates on IRS guidance impacting insurance companies
The IRS has issued three revenue procedures in the last 30 days to provide guidance to streamline tax accounting method changes to conform with the Tax Cuts and Jobs Act and to release the discount factors for the 2018 and 2019 accident years. The guidance also provides transition guidance as companies adopt the new reserve methods. For additional detail, please see the two links to our recent tax alerts on these revenue procedures.
New guidance provides automatic method changes for insurance companies to comply with section 846 and revises unpaid loss discount factors.
Rev. Proc. 2019-34 offers simplified procedures for insurers to change accounting methods to comply with section 807 for reserves.