The IRS has issued Notice 2009-48 outlining the reporting and notice obligations for employer-owned life insurance policies. The new rules become effective June 15, 2009.

The Pension Protection Act of 2006 (PPA) added Internal Revenue Code sections 101(j) and 6039I, to require employers holding certain life insurance policies on employees and directors (commonly known as "COLI" or "BOLI" policies – corporate-owned or bank-owned life insurance), to provide notice of certain policies' existence to the insured employees and directors and also to provide notice of certain policies to the IRS. Notice 2009-48 implements these requirements for policies issued after August 17, 2006. Code section 101(j) also restricts the tax exclusion for amounts received from these policies where employee consent is not obtained.

Please see full ASAP for more information.