According to the Wall Street Journal, the proposed sale of American International Group’s (AIG) unit American Life Insurance Co (Alico) to MetLife Inc. (MET) faces a tax dispute which may call for a special ruling by the Internal Revenue Service (IRS).

The dispute pertains to whether Alico is exempted from a 2004 ruling by the IRS. The ruling requires all insurers in the U.S. selling annuities and life insurance policies to customers outside the United States, to keep back U.S. taxes on income distributed to those clients. However, Alico, a life insurance and retirement products provider to 19 million customers in 54 countries, never implemented this ruling, citing that the company generates more than 80% of its income outside the U.S.

AIG has asked the IRS for a “private letter ruling” to affirm that its understanding of Alico’s exemption from the U.S. tax-withholding requirement is correct. However, Treasury officials have informed AIG that the company will not get any special treatment from the IRS.

AIG, which received about $180 billion of federal bailout including more than $80 billion in loans, has also been working for the last several quarters to sell assets and streamline its operations in an effort to repay the bailout money. U.S. taxpayers now own 80% of the company.

However, the concerns that need attention along with the repayment of government money are an improvement in overall managerial efficiency, inspired confidence among the dispirited staff and withstanding consistent pressure from the U.S. government to sell assets quickly to repay debt.

We are also concerned about AIG’s significant exposure to residential and commercial mortgage backed securities. These issues have to be dealt with head-on immediately to help revive the company.

Zacks Investment Research

1. (MET) MetLife’s Earnings Report Beats by a PennyMetLife Inc.’s (MET) fourth quarter adjusted operating earnings (excluding after-tax net investment gains and losses)...
2. (MET) MetLife to Sell Taiwan BusinessTaking a step to shore up its finances post the global financial crisis, MetLife Inc....
3. (MET) MetLife Offers Strong 2010 OutlookMetLife Inc. (MET) has forecast a significant improvement in its operating earnings next year, largely...
4. (MET) MetLife Surpasses Consensus Estimates by a PennyMetLife Inc.’s (MET) third-quarter operating earnings of 87 cents per share were only a penny...
5. (MET) MetLife Issues Fixed Rate NotesOn Sep 10, 2009, Metropolitan Life Global Funding I, a unit of MetLife Inc (MET)...
6. (C) Citigroup Faces TARP AuditNeil Barofsky, the U.S. special inspector general for the Troubled Asset Relief Program (TARP) plans...

Search Posts by Tag: AIG | American International Group Inc | MET | MetLife | Financial | Property & Casualty Insurance

RSS Feeds by Tag: AIG | American International Group Inc | MET | MetLife | Financial | Property & Casualty Insurance |

Other Posts by: vitalstocks | RSS Feed for this author