Even though an independent insurance company was not utilized, the Court of Appeals for the Fifth Circuit recently held in Ross v. Odom that the proceeds from a state established and administered survivors' benefit program were tax exempt as proceeds of a life insurance contract under section 101(a)(1) of the Internal Revenue Code. This note analyzes and inquires into the ramifications of the court's rationale, which was based on a functional approach to the concept of insurance and an interpretation of the legislative history. Of particular interest is the extension of the Odom precedent to privately funded, self-administered insurance plans in private business.
Ross v. Odom: Income Tax Treatment of Proceeds From Employer Funded and Administered Survivors’ Benefit Programs,
1969 Duke Law Journal
Available at: http://scholarship.law.duke.edu/dlj/vol18/iss2/7