rr-03-4.pdf

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Part 1

Section 809.-- Reduction in Certain Deductions of Mutual Life Insurance Companies

26 CFR 1.809-9: Computation of the differential earnings rate and the recomputed
differential earnings rate.

Rev. Rul. 2003-4
This revenue ruling contains the differential earnings rate for 2001 and the
recomputed differential earnings rate for 2000. Under § 809 of the Internal Revenue
Code, mutual life insurance companies use this rate in computing their federal income
tax liability for tax years beginning in 2001. Notice 2002-19, 2002-10 I.R.B. 619,
provided that the tentative differential earnings rate (DER) for 2001 and recomputed
differential earnings rate (RDER) for 2000 are zero. Subsequently, the Job Creation
and Worker Assistance Act of 2002, Pub. L. No. 107-147, § 611, amended section 809
of the Code by adding new paragraph (j). As amended, section 809(j) provides that the
DER shall be treated as zero for purposes of computing both the differential earnings
amount and the recomputed differential earnings amount for a mutual life insurance
company’s taxable year beginning in 2001, 2002, or 2003. See
Notice 2002-33, 2002-
21 I.R.B. 989. Accordingly, for purposes of § 809, the differential earnings rate for 2001
and the recomputed differential earnings rate for 2000 are as follows:
Differential Earnings Rate for 2001............................................ 0
Recomputed Differential Earnings Rate for 2000....................... 0
DRAFTING INFORMATION
The principal author of this revenue ruling is Katherine A. Hossofsky of the Office

of the Associate Chief Counsel (Financial Institutions & Products). For further
information regarding this revenue ruling, contact Ms. Hossofsky at 202-622-3477 (not a
toll-free call).