The Internal Revenue Service said yesterday that, as part of its priorities for the next year, it will clarify the definition of the term “gross receipts” for small property and casualty insurers for determining tax exemption status.

The original intent of the exemption was to protect “farm mutuals”–small companies established among groups of farmers to provide coverage for their properties–but some investment companies exploited the exemption by writing a minimal amount of insurance while keeping disproportionately high capital and surplus and investment income.

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