Rev. Proc. 2003-78, 2003-2 C.B. 1029, provides instructions for establishing an exemption from the section 4371 excise tax on insurance premiums paid to a foreign insurer or reinsurer when the exemption is based on the provisions of an income tax treaty to which the United States is a party. The instrument for acquiring the exemption is through a closing agreement between the foreign insurance company and the Commissioner of the Internal Revenue Service (IRS).
Rev. Proc. 2015-46, 2015-39 I.R.B. 414, amends Rev Proc. 2003-78 to update the mailing address and contact number, formalize certain requirements and provide corresponding changes to the form closing agreements attached as Appendices A and B to Rev. Proc. 2003-78. Additional application information is discussed further below.
Required Information for your Application:
Please submit the applicable form closing agreement, Appendix A (agreement for conventions with a qualified exemption, PDF) or Appendix B (agreement for conventions with an anti-conduit limitation, PDF) of Rev. Proc. 2015-46, in triplicate, each with an original signature.
Penalty of Perjury Statement:
A statement signed under penalty of perjury is required with the closing agreement application. The following page provides a sample penalty of perjury statement (PDF). An agreement must be renewed and recertified every three years subject to a penalty of perjury statement.
Note: A second sample (PDF) is provided for those with a closing agreement effective prior to October 10, 2003 that wish to recertify.
Any foreign insurer or reinsurer wishing to enter into a closing agreement under Rev. Proc. 2003-78, as revised by Rev. Proc. 2015-46, should submit a request for a closing agreement. In addition, the applicant must pay a user fee as stated in Appendix A of Rev. Proc. 2016-1, 2016-1 I.R.B. 1, or any successor procedure. The current user fee is $8,000 as corrected in Rev. Proc. 2018-1. Please do not send a check with your application.
Online payments can be made through Pay.gov if payment is made from a U.S. bank account. For further details, see Payment Instructions (PDF). If the user fee is paid online, please include a copy of the payment receipt with your application.
Payments by check must have “FET Program” noted in the memo section and must be mailed to:
The Beckley Finance Center
P.O. Box 9002
Beckley, WV 25802-9002
If sent by overnight mail, address to:
The Beckley Finance Center
110 N. Heber Street
Beckley, WV 25801
Letter of Credit:
A Letter of Credit (LOC) should be issued with a notice of non-renewal of not less than 90 days. The following page provides a Sample LOC (PDF).
Form SS-4 (Application for Employer Identification Number (EIN)):
Processing of the closing agreement application will require the applicant to have an EIN. Unless you already have an EIN, please complete this form and obtain an EIN prior to submitting your application. Please include this EIN with your application. Refer to IRS Form SS-4 to request an EIN.
List of Responsible Parties:
The individuals responsible for the performance under the closing agreement are those individuals who are employees, officers or directors of the applicant with whom the IRS can resolve FET matters that arise under the closing agreement and have the authority to sign on the taxpayer's behalf. Please provide a list of those parties, including their name, corporate title, business address, telephone, fax and e-mail address for each person that is to be designated a responsible party. Please ensure it is signed by a person authorized to sign the application, and that the person’s name is printed below and the form is dated. The following page provides a sample form for listing responsible parties (PDF) under the agreement.
Form 2848, Power of Attorney:
If you desire to be represented by a third party with respect to the closing agreement, please include an IRS Form 2848 with your application. Please use the latest available version of IRS Form 2848.
The IRS will periodically update a public list of foreign insurers or reinsurers that have entered into closing agreements with the IRS under Rev. Proc. 2003-78, as modified by Rev. Proc. 2015-46. Those foreign insurers or reinsurers wishing to be listed must file a consent to disclose tax information (as provided in the Consent) with the IRS. Please indicate if you wish to be listed on your application.
Applications with all the above original documents should be mailed to the following address:
Internal Revenue Service
Attn: Awo Archampong-Gray
Bldg IR / Mail Stop / Room 6329
1111 Constitution Avenue, NW
Washington, DC 20224 USA
If any questions, please contact: