Consent granted for a foreign insurance company to revoke its Section 953(d) "domestic corporation" election

Plain-English summary

A foreign-incorporated insurance company had elected under Section 953(d)
to be treated as a domestic (U.S.) corporation for tax purposes. That
election lets certain foreign insurers be taxed like U.S. companies; once
made, it stays in effect until the IRS consents to revoke it. After the
company's U.S. parent chain was acquired and it joined a new consolidated
group, the company reassessed and asked the IRS for consent to revoke the
election, effective January 1, 2025. The IRS granted consent. It also
confirmed the tax consequences of revoking: for Section 367 purposes, the
company is treated as a domestic corporation transferring all its property
to a foreign corporation, with any resulting gain reported in a one-day
tax year on January 1, 2025, and the acquiring foreign corporation is
treated as a controlled foreign corporation starting January 2, 2025. The
IRS expressed no opinion on the amount of any gain.

Ruling snapshot

• Question: May a foreign insurance company revoke its Section 953(d)
  election to be treated as a domestic corporation, and what are the
  Section 367 consequences?
• Outcome: Approved (consent to revoke granted; deemed outbound
  transfer and CFC status confirmed)
• Key authorities: IRC § 953(d); IRC § 367; IRC § 957; Rev. Proc.
  2003-47

Full text (IRS public release)

 Internal Revenue Service                                       Department of the Treasury
                                                                Washington, DC 20224

 Number: 202614011                                              Third Party Communication: None
 Release Date: 4/3/2026                                         Date of Communication: Not Applicable
 Index Number: 953.06-00
                                                                Person To Contact:
 ------------------------------------------------------------   --------------------------, ID No. ----------------
 ---------------------------------                              -----------------
 -----------------------------------------                      Telephone Number:
                                                                ---------------------
                                                                Refer Reply To:
                                                                CC:INTL:B04
                                                                PLR-113777-25
                                                                Date:
                                                                December 16, 2025

                 TY:-------
                 TY:-------

Legend

Taxpayer = ----------------------------------------------------------
Country A = --------------------------
Corporation W = ---------------------------------
Corporation X = ------------------------------
Corporation Y = ------------------------------------
Corporation Z = -------------------------------------------------
Date 1 = -----------------------
Year 1 = -------

Dear -----------------:

This is in response to your letter dated June 27, 2025, submitted on behalf of Taxpayer
by its authorized representative, requesting the consent of the Commissioner of the
Internal Revenue Service (“Commissioner”) to revoke Taxpayer’s election under section
953(d) to be treated as a domestic corporation.

The rulings contained in this letter are based upon information and representations
submitted by Taxpayer and accompanied by a penalty of perjury statement executed by
an appropriate party. While this office has not verified any of the material submitted in
support of the request for rulings, it is subject to verification on examination. The
information submitted in the request is substantially as set forth below. Unless otherwise
provided, all Code and section references are to the Internal Revenue Code of 1986, as
amended.

RULINGS REQUESTED

Taxpayer requests the following rulings:
PLR-113777-25                                 2

   A. Consent of the Commissioner to revoke Taxpayer’s election under section 953(d)
      to be treated as a domestic corporation.
   B. For purposes of section 367, Taxpayer will be treated as a domestic corporation
      transferring, as of January 1, 2025, all its property to a foreign corporation in a
      section 361 exchange, subject to sections 367(a) and (d), and any gain
      recognized will be included as income in Taxpayer’s one-day taxable year
      beginning and ending on January 1, 2025.
   C. The acquiring foreign corporation will be treated as a controlled foreign
      corporation, as defined in section 957, for the taxable year beginning on January
      2, 2025.

FACTS AND REPRESENTATION

Taxpayer is a corporation incorporated in Country A and since January 1, Year 1, has
been treated as a domestic corporation pursuant to an election under section 953(d).
Taxpayer is wholly owned by Corporation Z, a domestic corporation, which in turn, is
wholly owned by Corporation Y, a domestic corporation. Corporation Y is wholly owned
by Corporation X, a domestic corporation.

On Date 1, Corporation W acquired all of the stock of Corporation X and Corporation X
and its subsidiaries (including Taxpayer) became members of the U.S. federal
consolidated group of which Corporation W is the common parent. Since the
acquisition, Taxpayer has reassessed the benefits and burdens associated with its
section 953(d) election and decided to seek consent from the Commissioner to revoke
its election effective January 1, 2025.

Taxpayer represents that the domestic entity acquisition (within the meaning of Treas.
Reg. §1.7874-12(a)(5)) that would occur as a result of a revocation of Taxpayer’s
section 953(d) election would qualify as an internal group restructuring (within the
meaning of Treas. Reg. §1.7874-1(c)(2)).

LAW

Section 953(d)(1) provides, in general, that if (A) a foreign corporation is a controlled
foreign corporation (as defined in section 957(a) by substituting “25 percent or more” for
“more than 50 percent” and by using the definition of United States shareholder under
section 953(c)(1)(A)), (B) such foreign corporation would qualify under part I or part II of
subchapter L, chapter 1 of subtitle A of the Code, for the taxable year if it were a
domestic corporation, (C) such foreign corporation meets such requirements as the
Secretary shall prescribe to ensure that the taxes imposed by chapter 1 of subtitle A of
the Code on such foreign corporation are paid, and (D) such foreign corporation makes
an election to have section 953(d)(1) apply and waives all benefits to such corporation
granted by the United States under any treaty, for purposes of this title, then such
corporation shall be treated as a domestic corporation.
PLR-113777-25                                3

Section 953(d)(2)(A) provides that in general an election under section 953(d)(1) applies
to the taxable year for which it is made and all subsequent taxable years unless revoked
with the consent of the Secretary.

Section 953(d)(5) provides that for purposes of section 367, if an election under section
953(d) is made by a corporation for any taxable year, and such election ceases to apply
for any subsequent taxable year, the corporation is treated as a domestic corporation
transferring (as of the first day of the subsequent taxable year) all of its property to a
foreign corporation in connection with an exchange to which section 354 applies.

Section 4.02(1) of Rev. Proc. 2003-47 provides, in part, that once approved, a section
953(d) election remains effective for each subsequent taxable year in which the
requirements of that revenue procedure and section 953(d) are satisfied unless revoked
by the electing corporation with the consent of the Commissioner. Further, it states that
if an election is terminated or revoked, the foreign corporation and its successors will be
barred from making another election under section 953(d) without the consent of the
Commissioner. Section 4.02(2) of Rev. Proc. 2003-47 provides that the revocation of a
section 953(d) election will cause the corporation to be considered a foreign person for
purposes of the excise tax under section 4371 on premiums for insurance or
reinsurance issued by the foreign corporation.

CONCLUSION

Based solely on the information submitted and the representations made:

   A. Consent is granted for Taxpayer to revoke its section 953(d) election to be
      treated as a domestic corporation.
   B. For purposes of section 367, Taxpayer will be treated as a domestic corporation
      transferring, as of January 1, 2025, all its property to a foreign corporation in a
      section 361 exchange, subject to sections 367(a) and (d), and any gain
      recognized will be included as income in Taxpayer’s one-day taxable year
      beginning and ending on January 1, 2025.
   C. The acquiring foreign corporation will be treated as a controlled foreign
      corporation, as defined in section 957, for the taxable year beginning on January
      2, 2025.

The above rulings are only applicable with respect to the Code sections addressed
herein. We do not express or imply an opinion on the federal tax consequences of any
other aspect of this transaction, such as the amount of any gain reportable under
section 367.

This ruling is directed only to the taxpayer requesting it. Section 6110(k)(3) of the Code
provides that it may not be used or cited as precedent.
PLR-113777-25                                            4

In accordance with the Power of Attorney on file with this office, a copy of this letter is
being sent to your authorized representatives.

A copy of this letter must be attached to any income tax return to which it is relevant.
Alternatively, taxpayers filing their returns electronically may satisfy this requirement by
attaching a statement to their return that provides the date and control number of the
letter ruling.

                                                   Sincerely,

                                                   -----------------

                                                   Andrew L. Wigmore
                                                   Senior Counsel, Branch 4
                                                   Office of Associate Chief Counsel (International)


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