Internal Revenue Service
Revenue Ruling

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 Rev. Rul. 64-72

1964-1 C.B. 85

Full Text

Rev. Rul. 64-72 /1/

The Internal Revenue Service will not follow the decision of the United States Court of Appeals for the Eighth Circuit in the case of United States v. Weber Paper Company , 320 Fed. (2d) 199 (1963), affirming 204 Fed. Supp. 394 (1962).

The plaintiff had made insurance `premium deposits' with a reciprocal flood insurance exchange. The insurance company maintained a 100-percent reserve against losses. The contract provided for withdrawal of 99 percent of the premium deposits by the subscriber subject to certain conditions. The Court of Appeals affirmed the decision of the United States District Court for the Western District of Missouri that such `premium deposits' represented deductible business expenses under section 162 of the Internal Revenue Code of 1954 and the regulations issued thereunder.

Although certiorari was not applied for in the Weber Paper Company case, the decision will not be followed as a precedent in the disposition of similar cases, and the position of the Service, as set forth in Revenue Ruling 60-275, C.B. 1960-2, 43, will be maintained pending further judicial tests.

/1/ Based on Technical Information Release 543, dated Feb. 10, 1964.