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Taxing The Disabled: The Irs, The Insurance Industry, And The Disability Waiver Of Premium Rider, Andrew Strelka
Taxing The Disabled: The Irs, The Insurance Industry, And The Disability Waiver Of Premium Rider, Andrew Strelka
Richmond Public Interest Law Review
The disability waiver of premium rider is an optional addition to life insurance policies that waives subsequent annual premiums in the event the policyholder becomes disabled. Wong Wing Non v. Commissioner, the leading opinion on the taxation of the disability waiver, has been misconstrued to create scenarios where disabled policy holders are subjected to taxes they would not have otherwise incurred without the disability waiver. This comment argues for a different interpretation of Wong Wing Non and proposes legislation as an alternative challenge to current taxation policies.
Taxing The Disabled: The Irs, The Insurance Industry, And The Disability Waiver Of Premium Rider, Andrew Strelka
Taxing The Disabled: The Irs, The Insurance Industry, And The Disability Waiver Of Premium Rider, Andrew Strelka
Richmond Journal of Law and the Public Interest
This Comment discusses the current tax methods being applied to the disability waiver of premium rider, an optional addition to life insurance policies' that waives subsequent annual premiums in the event the policyholder becomes disabled. This Comment will show that the seminal case regarding the taxation of disability waiver of premium riders, Estate of Wong Wing Non v. Commissioner, has been misconstrued by both the IRS and the insurance industry. This has allowed for the existence of two scenarios where a disabled policyholder is subjected to an unexpected tax liability he would have avoided but for the onset of disability. …