Commissioner v. National Reserve Ins.

The Commissioner seeks review of a decision of the Tax Court holding that the appellee, an Arizona corporation issuing policies of insurance on the assessment plan, hereinafter called the Company, was a life insurance company within the definition of Section 201(a) of the Internal Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 201, and hence not liable for income tax deficiencies found by the Commissioner for the tax years 1939 and 1940 to be due on its income from assessment receipts for those years.

The Commissioner found that the Company was a mutual insurance company taxable under Section 207 of the Internal Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 207. The Company does not contest this finding of the Commissioner if it be not a life insurance company within Section 201(a).

The net taxable income of a life insurance company is the gross income from interest, dividends and rents less, inter alia, the amount placed in its reserve fund, described in Section 203(a) of the Revenue Code, 26 U.S.C.A.Int.Rev.Code, § 203.

Section 201(a) of the Code provides, “Sec. 201. Tax on life insurance companies

“(a) Definition. When used in this chapter the term ‘life insurance company’ means an…