Treasury Responds to Reps. Neal, English Letter re STOLI

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In a November 28, 2007 Advocacy Update, we reported that two members of the House Ways and Means Committee, Reps. Richard Neal (D-MA) and Phil English (R-PA), had asked the Treasury Department to notify elderly taxpayers of the potential tax consequences of participating in STOLI transactions. In a recent letter, Assistant Treasury Secretary Kevin Fromer responded to the Neal/English letter. Fromer first noted that the Neal/English letter had raised several state law issues—including questions about state insurable interest laws-- which are not within the jurisdiction of Treasury. He went on to note that the different types of STOLI transactions could result in different treatment under the tax laws, and that Treasury would consider the issues raised by Neal and English as it worked with the IRS on how to address STOLI transactions.

Full text of the Treasury letter