Connecticut General Life Insurance Company - Page 15

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                  Petitioners further argue that in the absence of a rule                                
            under the regulations as to how to treat losses of ineligible                                
            nonlife companies that constituted part of a previously                                      
            affiliated and consolidated group, the statutory and regulatory                              
            provisions are unclear and ambiguous, and petitioners should be                              
            entitled to treat losses of the respective ineligible nonlife                                
            companies that constituted members of the former INA and PHC                                 
            Groups under any reasonable interpretation of the statute.                                   
            Petitioners then argue that treating members of the former INA                               
            Group and members of the former PHC Group as two single nonlife                              
            entities constitutes a reasonable approach.                                                  
                  Additionally, if we agree with respondent's interpretation                             
            of section 1.1502-47(m)(3)(vi), Income Tax Regs., with regard to                             
            the companies that constituted members of the former INA and PHC                             
            Groups, petitioners argue that the regulation should be                                      
            invalidated.                                                                                 
                  Petitioners also argue that a calculation of the ineligible                            
            CNOL's using respondent’s separate entity method would cause an                              
            increased overall tax liability for the CIGNA Group, as compared                             
            to the collective tax liabilities of the CIGNA Group and the                                 
            former INA and PHC Groups, assuming the former INA and the PHC                               
            Groups had never been acquired.  Petitioners thus conclude that                              
            any such calculation would constitute an improper, punitive                                  
            calculation.                                                                                 
                  We disagree with each of petitioners’ arguments.                                       




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