Life Insurance Rebates Can Be Excluded From Income, IRS Says

The IRS in a private letter ruling released Friday concluded that rebates customers receive from a life insurance agency aren’t considered gross income for the customers.

The life insurance agency that requested the ruling sells policies and offers commission rebates that reduce the cost of customers’ premiums. Because the rebates don’t count as income, the insurance agency doesn’t have to send an information report to the IRS or customers, the IRS said in the ruling.

• The state where the life insurance agency resides allows companies to use commission rebates to increase competition and to provide goodwill. To receive the ...